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How long to keep bills?

post #1 of 17
9/21/12 at 8:09am
Thread Starter 

How long do bills need to be stored? We do it the old fashioned way. It's just what suits us right now so we aren't paying online. And how long do you keep your tax copies?

 

TIA

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post #2 of 17
9/21/12 at 10:48am

I don't know exactly how long bills "need" to be kept anymore. I pay mostly everything online, and will be phasing into paying everything 100% online soon. I was sooo resistant to that for a long time... paying things online. These days it's very hard to avoid so I just gave up. I assume it would be good to keep a 3-month record though. That's my guess. Before I started paying bills online, I would keep my bill statements for a year. As for taxes, I recall reading somewhere that you should keep tax records for seven years. Don't know what the significance of 7 is. 

post #3 of 17
9/24/12 at 6:46am
Thread Starter 
Quote:
Originally Posted by erinmattsmom88 View Post

I don't know exactly how long bills "need" to be kept anymore. I pay mostly everything online, and will be phasing into paying everything 100% online soon. I was sooo resistant to that for a long time... paying things online. These days it's very hard to avoid so I just gave up. I assume it would be good to keep a 3-month record though. That's my guess. Before I started paying bills online, I would keep my bill statements for a year. As for taxes, I recall reading somewhere that you should keep tax records for seven years. Don't know what the significance of 7 is. 

Thanks. How has the transition been paying online? Do you pay as your billed? I have to get to it but just so much else is always taking up our time. 7 years!! Wow. Long time. We do our taxes ourselves so no tax consultant to help us on that.

post #4 of 17
9/24/12 at 9:01am
Quote:
Originally Posted by Neera View Post

Thanks. How has the transition been paying online? Do you pay as your billed? I have to get to it but just so much else is always taking up our time. 7 years!! Wow. Long time. We do our taxes ourselves so no tax consultant to help us on that.

 

We keep important papers for at least 7 years. Important being - tax papers, house buying/selling, etc.

 

All bill paying is done online. I shred every receipt, unless I have to keep it for something (like when I purchased a new game system, I kept the receipt in case something went wrong with it while the warranty was still in play).

 

I pay as it fits in my budget for that month. Some things get paid with the first check, some things get paid with the second check. *shrug*

post #5 of 17
9/24/12 at 10:14am
Thread Starter 
Quote:
Originally Posted by Monkeygrrl View Post

 

We keep important papers for at least 7 years. Important being - tax papers, house buying/selling, etc.

 

All bill paying is done online. I shred every receipt, unless I have to keep it for something (like when I purchased a new game system, I kept the receipt in case something went wrong with it while the warranty was still in play).

 

I pay as it fits in my budget for that month. Some things get paid with the first check, some things get paid with the second check. *shrug*

Thanks.

 

I think I didn't explain clearly. I meant do you have to set up automatic payment online or you pay every bill individually every month.

post #6 of 17
9/24/12 at 10:22am
Keep papers on house buying forever. Seriously, do not get rid of those.

Seven years after filing is the statute of limits for the IRS to audit tax returns (unless there's reason to suspect fraud). So hold on to them at least that long.

I get rid of bills once they're paid, unless I have issue with the billed items or amount, in which case I get the issue resolved and hold onto the records for a year or two.
post #7 of 17
9/24/12 at 10:38am
Quote:
Originally Posted by Neera View Post

Thanks.

 

I think I didn't explain clearly. I meant do you have to set up automatic payment online or you pay every bill individually every month.

 

I only do auto payment for one thing. The rest gets paid according to the money available. Our checks are differing amounts, so I need to see what the money looks like before paying. I get some through ebills, but really, I have them listed on my budget, and I put them where they need to be. When the money comes in, I look at the budget, then pay that bill, either through my bank, or through their website.

post #8 of 17
9/26/12 at 6:20am
Thread Starter 
Quote:
Originally Posted by Monkeygrrl View Post

 

I only do auto payment for one thing. The rest gets paid according to the money available. Our checks are differing amounts, so I need to see what the money looks like before paying. I get some through ebills, but really, I have them listed on my budget, and I put them where they need to be. When the money comes in, I look at the budget, then pay that bill, either through my bank, or through their website.

Thanks.

post #9 of 17
9/26/12 at 6:23am
Thread Starter 

I have to add to this...

 

I am filing bank statements presently. I am guessing it's 7 years as well? I mean we file our taxes based on our W2 and that's it really.

post #10 of 17
9/26/12 at 6:40am

I don't keep paper bank statements, unless there's something weird on them I want to talk to the bank about.  I can get .pdf files from the bank, and I prefer that to having the papers around. 

post #11 of 17
9/27/12 at 6:39am
Thread Starter 
Quote:
Originally Posted by MeepyCat View Post

I don't keep paper bank statements, unless there's something weird on them I want to talk to the bank about.  I can get .pdf files from the bank, and I prefer that to having the papers around. 

Hi MeepyCat,

 

Does the bank allow u to pull statements as old as 7 yrs? I have to check with the bank on that. We know someone who was audited. (He didn't seem to know the 7 yr rule.) I believe he had to order back statments of some that were missing and they were charged for. So, am a little confused on this one. Also, for e.g. if you get medical deductions on your tax then you need to store each receipt/invoice you are claiming the deduction on. If it is missing then depending on your auditor they might accept a credit card statement transaction. Credit card statements need to be stored as well for those many # of yrs depending on what deductions one is getting. Just FYI.

post #12 of 17
9/27/12 at 10:07am

I'm really ruthless about what I keep on file because my experience is that putting more stuff in the filing system doesn't mean better access to individual pieces of data.  My DH is a low-level hoarder, and would keep everything - every pay stub, every bank statement, every credit card statement, every bill and receipt.  The one time we did have trouble with the IRS, it took hours to find the paperwork on his stock options and the mortgage (he bought the house before he met me).  I would rather have a filing system that consists of the tax returns (and associated backup - I keep info on deductions in the same file as the return), the stock info, and the mortgage.

 

Yes, that means I might need to pay retrieval fees to the bank or the credit card company in the event of an audit.  When we had files with *everything*, we couldn't find *anything*, and if they'd cared about seeing individual bank statements, we'd have had to pay retrieval fees anyway.

 

If you have the space and the time and the discipline to keep a filing system going and tidy, sure, keep it all!  But I don't, and I think it's better to be systematic about what stays and what goes.

post #13 of 17
9/28/12 at 6:58am
Thread Starter 
Quote:
Originally Posted by MeepyCat View Post

  I would rather have a filing system that consists of the tax returns (and associated backup - I keep info on deductions in the same file as the return), the stock info, and the mortgage.

 

Thanks. That's definetly a better idea. Then I could actually throw away the rest of the medical papers that weren't needed for tax purpose.

post #14 of 17
10/10/12 at 12:42pm
Thread Starter 

Do you keep ATM receipts or any other proof showing transfer of money from one a/c to another?

post #15 of 17
10/10/12 at 1:22pm

No, I don't keep ATM receipts or records of transfers between accounts. 

 

It is frankly none of the IRS's business when I took money out of my bank account, or how much.  The transfer of funds from one of my accounts to another of my accounts (or to the account of my spouse) is not their problem.  It has no tax impact.  (Transfers to or from tax-free accounts could have some impact - those accounts send special tax statements at year-end).  The audit of a tax return is not a fishing expedition for evidence of what anyone did with every last cent of their money.

post #16 of 17
10/11/12 at 1:23pm
Thread Starter 

Well, what we've heard is that when audited the auditor will go thru every single incoming amount into your bank.  So if we get a refund check we photocopy it and attach it to the relevant bank statement where it shows up as a credit. This is a while back, maybe 2 years, when I looked at a transfer in the bank statement and it didn’t clearly say where the money was coming from. Now, the recent statements are clearly stating what bank and account it arrived from. In the past years the banks have changed hands so it’s possible the old one wasn’t giving specific details.

post #17 of 17
10/11/12 at 2:41pm

That would be an extremely time-consuming audit, and therefore it would have to be a pretty unusual one.