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BS: don't de-clutter your financial files
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Subject: BS: don't de-clutter your financial files From: GUEST,anonymous Date: 12 Apr 13 - 10:40 AM Well, the de-clutter thread is going again, this time with ten exclamation points. I've been doing my taxes, and I'm here to tell you not to go overboard when 'decluttering' your financial papers. It seems like a good idea to practice a 'buy and hold' philosophy when you make investments or save for retirement. Trouble is, nobody tells you that if BUY the investment, you need to HOLD onto the record of it. Someday you will probably sell, and you need to know how much you paid for it. And you also need to know how much may have been reinvested in it over the years. I just spent an awful four hours tracking down the cost of something I had bought in 1997. The fund had merged with four other entities and changed its name over time. If I had not saved certain financial records since 1997, I would have been reporting $29,000 of income with no expense to offset it. (Yes, I asked the broker, and they were no help.) Pay no attention to those well-meaning people in the magazines who tell you to throw away your tax returns after three years. A lawyer once told me to keep my tax returns forever, and he was right. You may need to them to show what you've paid for your house, where your IRA came from, and what capital gains and divvies have gone back into your investments. Don't just keep the 1040, keep the 1099's, etc, that provide investment information. All these records will probably fill one box, which you can keep under your bed. You will sleep better knowing it's there. |
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Subject: RE: BS: don't de-clutter your financial files From: Charmion Date: 12 Apr 13 - 04:20 PM Revenue Canada says six years is the minimum retention period. Why be stingy? Keep them all! I believe this is why filing cabinets come with four drawers: so for 40 plus years you can gradually fill them up with folders marked "Expenses & Taxes [year]" and "Investment fund statements". There's nothing like 15 years' worth of receipts for house taxes or gas bills to convince you that, in fact, the basics really do cost twice as much as they used to -- it's not just your imagination at work. How can this be when inflation and interest rates are lower than whale droppings? This enquiring mind would like to know. Or perhaps not. I'm too old to enjoy the experience of futile rage. |
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Subject: RE: BS: don't de-clutter your financial files From: Stilly River Sage Date: 12 Apr 13 - 04:46 PM Charmion, it's not because you're required to hold it X amount of time that he/she is talking about, it's because it is a royal pain in the ass to try to figure out how much the shares originally cost because when you do your taxes after you sell. The taxable amount is charged according to profit or loss (capital gains) on those investments. Ask me how I know it is a colossal pain in the ass. . . !!!!!!!!!! SRS |
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Subject: RE: BS: don't de-clutter your financial files From: McGrath of Harlow Date: 12 Apr 13 - 06:59 PM Decluttering for anything like that would be about putting in order so as to be able to find stuff, never about getting rid of papers that could conceivably have any significance. Properly organised stuff like that actually take up relatively little space. |
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Subject: RE: BS: don't de-clutter your financial files From: GUEST,anonymous Date: 12 Apr 13 - 11:01 PM Thanks, Stilly and McGrath. It's comforting to know that other people have the same problems at times. I do wish they wouldn't send me so much stuff that I don't really need. Sending it via e-mail saves time and paper, but it doesn't help with the problem of missing something important in the flood of info. Over the years I have read a lot of investment advice, but rarely does anybody explain the need for certain records. As an example, I can cite a lawyer I knew who bought a mutual fund while in college. Dividends and capital gains were reinvested for years, and he never kept the records. Then at about age 35 he wanted to sell it. Nobody could help him figure his costs. I'm posting this at tax time because it's on my mind and because I hope catters will tell their families. |
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Subject: RE: BS: don't de-clutter your financial files From: Stilly River Sage Date: 12 Apr 13 - 11:36 PM Not sure why this topic was started anonymously - your regular Mudcat moniker wouldn't have been compromised by this thread. Or you could have added it to the regular "declutter" thread. Lots of people read those who never or rarely contribute. Good paper records make life easier for so many reasons - if you are sorting out your own affairs, or if, heaven forbid, something happens and your heirs have to sort it out. My father had pretty good records (he WAS a librarian. . .) and that helped a great deal. SRS |
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Subject: RE: BS: don't de-clutter your financial files From: JohnInKansas Date: 13 Apr 13 - 12:42 AM A box under the bed isn't necessarily adequate for storage of records, partly due to the bulk of paper most people actually should keep and also because a visiting guest who visits overnight might wet the bed. Since the IRS is the main PIA in the USA who might want stuff from your records it might be noted that typical "notices of discrepancy" being received in recent times (according to reports) most likely will be for claims that they think you underpaid three years ago (on average), and it's not unusual for the return questioned to require "carryover" information from earlier years. (Not all information from one year that's affected by prior years is particularly obvious, even for stuff unrelated to long term investments.) It's also worth a note that the IRS is most likely to assume that you "failed to include" something that they think you should have, but they will not tell you what they assumed. Since your actual return only reports "end results of calculations" you cannot reconstruct how you calculated anything if the return is the only thing you kept in your records, so you can't tell if a particular specific 1099-INT was included or not. When your return is filed, the IRS instantly converts it to a "data record" that no human can read, and they will NOT tell you - they CAN'T DO IT - what hallucination resulted in their demand. Also, none of the tax preparation programs that many people use saves a sufficiently detailed record of "how you got there" to allow a reconstruction with the detail needed for a reply - even if they'd tell you what the question is. The reply, for most of us, doesn't really matter all that much since the IRS doesn't have anyone to look at it anyway, and any reply you provide will just go in the 30" deep stack of "stuff" on top of the 17,349 file cabinets (average for the several reporting offices) containing the replies from the past nine years - that haven't been opened yet. It bothers me that I only have complete ledgers and other records back to about 1997. Records before then, to 1990 or so, are mostly for "personal interest" as "family history," and admittedly there are a few gaps. [I do have a scanned copy of the first paycheck they deducted social security from, but that's just a family relic for ancestral history (1951).] Digital storage, with redundant backups is almost a necessity to keep the local fire marshal from complaining about your "paper hazard" if you choose to keep reasonably complete records. My recent acquisition of a good (not really cheap) scanner has greatly simplified maintaining my "memories," and all the records I've found it possible to recover from current and older (mostly paper before ca. 2000) storage methods only take about 10% as much disk space (in each backup) as all of her "pictures of dead relatives" she's collected since she started looking up her genealogy. John |
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Subject: RE: BS: don't de-clutter your financial files From: GUEST,anonymous Date: 13 Apr 13 - 12:29 PM Two years ago I used saved tax returns (might have been starting in 1981) to claim $22,000 in basis for an IRA. I had done the calculations all wrong in the past. On the IRS website, they let you download the IRS basis forms from YEARS ago so you can re-file. So evidently I am not the only person who ever messed that calculation up. Claiming the basis important. It means you don't have to pay tax on the money when you retire, because it was your own money to begin with. SRS - I didn't post to the declutter thread for two reasons. One is that few people will think that a financial matter will be discussed there. Another is that I avoid threads that use ten exclamation marks at a time. They seem a little squirrelly, n'est pas? |
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Subject: RE: BS: don't de-clutter your financial files From: McGrath of Harlow Date: 13 Apr 13 - 12:47 PM And it's not wise to assume that the financial institutions are going to have accessible records. A few weeks ago I needed some information about a transaction a few yeas ago, and asked the Halifax to confirm something - and found the records they bother to keep only go back seven years. And that is what used to be a Building Society , dealing with mortgages stretching over maybe 40 years. |
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Subject: RE: BS: don't de-clutter your financial files From: JohnInKansas Date: 13 Apr 13 - 02:16 PM "On the IRS website, they let you download the IRS basis forms from YEARS ago so you can re-file." My experience has been different there. I spent about 15 months not long ago attempting to get the IRS to identify which return their question was about (I had filed an ammended return for the year, and they didn't say which version they made reference to in their "discrepancy notice.") I was never able to get an answer. NO PRIOR YEAR RETURNS could be accessed at IRS web sites or could be produced or accessed by local or district IRS offices, and six months after I had responded to a specific IRS demand (the first one of three) that I give them a copy of a return from my own records they could not verify that they had it - because they didn't have anyone to open the incoming mail, and apparently my responses were still in a mail bag waiting to be examined. My difficulty was resolved by three separate "IRS ADVOCATES" but no explanations were ever provided other than the notices that the "problem" was "officially dismissed." (I framed the last reply and it's hanging on the wall, but I still don't know what the whole flap was about.) Maybe if their claim had been for more than $100 results would have been different, but I really wanted to know whether I'd made an error so I wouldn't do it again. I couldn't find anything questionable in my own records, but they wouldn't (couldn't) tell me anything from their records either. For anyone who might have a similar difficulty, the IRS ADVOCATE SYSTEM was mandated and (under)funded by Congress to "assist taxpayers" and actually gets problems resolved fairly efficiently - if you can get the problem into their system. They have their own website where their internal newsletters can give a very good idea of how F***D UP the IRS is; but you'll probably have to contact an individual agent by phone to get their help. John |
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Subject: RE: BS: don't de-clutter your financial files From: Stilly River Sage Date: 13 Apr 13 - 08:21 PM The exclamation points are there to make it recognizable on the page. That's all. And we regularly talk about financial matters. SRS |
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Subject: RE: BS: don't de-clutter your financial files From: Charmion Date: 14 Apr 13 - 07:42 AM I just filed our taxes with Revenue Canada, a task that required less than two hours for the pair of us. We have been audited several times over the last few years, and each time the issue was settled by sending in copies of relevan receipts. (Revenue Canada is deeply suspicious of charitable donations.) When I read about personal experiences with the IRS, I get the urge to go and hug my Canadian passport. |
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Subject: RE: BS: don't de-clutter your financial files From: GUEST,anonymous Date: 14 Apr 13 - 09:16 AM John, your troubles have nothing to do with my statement. I said you could get the forms for reporting IRA basis. (Basis is how much of your own money you've got in something, whether it's a retirement account or a typewriter.) The forms are blank, ready for the taxpayer to fill in correctly and re-file. No matter how many years you hold on to something, you need to keep track of its basis. Ignore columnists who tell you to throw away records after three years or seven years. Those people probably live paycheck to paycheck and don't know anything about saving for the future. Of course, we all get stuff we don't need. We can pitch the paper which tells us that Johnson Hicks is replacing Hicks Johnson as a board member. But if a paper has your name on it and a dollar amount which you have either put in or taken out, you need to keep it. |
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Subject: RE: BS: don't de-clutter your financial files From: Jim Dixon Date: 14 Apr 13 - 01:14 PM Interesting that this topic should come up right now, because I just had a big fight with my wife about this very topic. My wife was on one of her de-cluttering sprees. She's the kind of person who can ignore a problem for months or years and then one day get it into her head that she wants to solve everything in one stroke and damned be anybody who gets in her way. When she gets in that kind of mood, she want to throw away every scrap of paper that comes within her field of view, without even looking at what it is. I won't let her do this, so this makes me the bad guy. My mother died 3 years ago. For several years before that, all of her property was held in the name of a trust, and I was the trustee. In effect, I was in control of all her finances. I paid her nursing-home bills, out of her savings, but I signed all the checks. Eventually, all her money was used up, and she went on Medicaid, but I was the one who had to fill out and submit the paperwork for her, and provide evidence that all her money had been spent, and my signature went on those forms. In the end, I got no inheritance, and even ended up paying some of her bills out of my own pocket. My wife I know this is highly theoretical, and highly improbable, but since the State of Missouri had to pay about 2 years of nursing-home expenses for my mother, amounting to around $96,000, they could theoretically try to recover some of that money from me, if they ever got it into their heads that I had done anything improper, such as filing inaccurate financial statements, or spending any of her money for my own benefit instead of hers. If anyone should ever make such an accusation, I would certainly be better off if I could prove it wasn't true. And although it's highly unlikely (I think) that it will ever happen, I know I will sleep better knowing that I have the documentation to prove that I had administered my mother's affairs properly. (Or if I made any mistakes, at least they were innocent mistakes, not deliberate fraud.) Well, I think I finally made my point and won that argument, although not until a lot of hurtful things had been said. Here's another thing. Online banking is a great thing, but I don't think you should go totally paperless. Back when I had to submit financial reports to the state for my mother, they demanded to see bank statements, and it was very convenient that I could go online and print them out and submit them to the state. I could do this going back several months, maybe even years. But eventually, my mother's account dwindled down below a certain minimum balance, and the bank started nickel-and-diming us to death with many fees, so we had to close that account. Once the account was closed, I no longer had access to any of those online records. Online is fine, but make sure you have a paper backup. |
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Subject: RE: BS: don't de-clutter your financial files From: Stilly River Sage Date: 14 Apr 13 - 03:44 PM I needed to go back to a point of transfer on some stocks and poked around the web site for the company that issued the stocks. Turns out that their investor support includes a long PDF of rates month by month. I used that to make my calculations. I kept a couple of boxes of estate stuff until last year. Fourteen years seemed long enough for some of the general transactions, but I still have the core information to do with birth, death, and taxes. SRS |
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Subject: RE: BS: don't de-clutter your financial files From: pattyClink Date: 14 Apr 13 - 05:44 PM p.s. Joe and others scanning records, a cautionary tale. I have been scanning a lot of old stuff and it can be a brilliant solution. But if you have a sheetfeeder, leave it set on 'duplex' so the backs of 2 sided stuff gets scanned, or double-check your scans to be sure it all got saved! When working on taxes, found a bunch of medical records I mis-scanned to have only the odd pages, no evens. Helpfully, a Fujitsu can be set up to stay set to duplex but to sense and delete blank pages. |
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Subject: RE: BS: don't de-clutter your financial files From: JohnInKansas Date: 15 Apr 13 - 04:19 AM My "favorite" scanner is an Epson that feeds the original through ONCE and scans both sides of the sheet in the same pass. This one is a little limited in that it's maximum width is 8.5 inches (or the nearest A# size) and it's a business grade so color fidelity isn't perfect on some photos, but it's fast and NEVER tears up an original beyond an occasional little wrinkle. I've had a number of others, mostly multipurpose machines that scan one side, feed the paper back through to turn it over, feed it through again to scan the second side, and then feed it back through to turn it right side up so that everything is in the right order in the output pile. (And some feed it through again so it can come out at the right end of the machine.) At least that's what they say it does. ... (?) This is the usual approach to two-sided scanning, but I've yet to find one of this kind that doesn't jam the original - and pretty much destroy it - on a fair percentage of the input sheets. The problem is that I do quite a bit of scanning of old/fragile/wrinkled/dog-eared originals - and lots of documents (books/magazines) with variable paper weights, often several in a single document, that run to a few hundred sheets, so others who work mostly with office grade originals may get fewer chewed up originals. Based on my unsuccesses, I always use these machines only as single-side scanners through the ADF. My approach when I need the additional sheet width (up to 11+ inches) the multis can handle is to run them all through one sided, saving as .jpg to get a separate file for each page face, and run a batch file to renumber them with odd page numbers. Flop the whole stack over and run the other side through, which of course scans them back to front, but another batch file renumbers with even page numbers in reverse order. Merge the two sets of pages and drag them to the pdf maker (after you find and correct for that one page that always seems to have had three sides on it when the number of odd pages doesn't match the number of even ones, although I've yet to actually find one of those "sheets with three sides" in the originals). When it works, it's quicker than it sounds like, and when you scan enough stuff regularly you do get in the habit of checking all the scan settings to make sure they match what you're scanning - EVERY TIME (except when you forget to). Since any ADF can occasionally feed a double page, or slip one a little crooked, I do make it a habit to proof the final pdf to make sure all the pages are in place, but usually I can use the "document arrange" view in my pdf editor that shows a dozen or so pages per screen to catch the rare misfeeds so it's pretty quick on most things with lots of pages to be checked. The pdf editor/converter can delete blank pages, but I rarely bother since a blank page is many fewer bytes than one with incredibly important info on it. Now if they had something would automatically delete the &^#%$#@!! ADVERTISEMENTS it would save a lot of drive space on the magazines. John |
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Subject: RE: BS: don't de-clutter your financial files From: Stilly River Sage Date: 12 May 13 - 06:14 PM A friend is going through lots of trouble to duplicate bills from an injury and long hospital stay last year. Her son paid bills then threw the originals away! We don't know what he was thinking ("He wasn't thinking, that is the problem!" she exclaims!). She has an extension for her income taxes, but they still eventually have to be turned in. When in doubt, keep it. SRS |
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Subject: RE: BS: don't de-clutter your financial files From: GUEST,leeneia Date: 12 May 13 - 07:00 PM Thanks for posting about that, SRS. It's a very good point. |
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Subject: RE: BS: don't de-clutter your financial files From: GUEST Date: 13 May 13 - 04:53 AM Fire hazard? Suitable fire resistant storage boxes are available from any good stationer. I wouldn't rely on digital storage for anything vital. Properly stored hard copy is more reliable and you don't need to shift it to new media when you replace your computer. Also there is always the risk that you will find yourself in a situation where you are required to produce the original document. Similarly I won't have all my accounts billing on line. There are too many occasions where you need to produce a document produced in the last 3 months to verify your address as well as an official id like a driving licence or passport. |
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Subject: RE: BS: don't de-clutter your financial files From: JohnInKansas Date: 13 May 13 - 06:51 AM If you can store it all in original paper, you've got a lot more space than I have. With a very small home based business, and personal financial logs and tax returns for less than 10 years I had a 5-drawer file cabinet so full I couldn't add the next tax return. Nobody should keep digital files on a single drive, but with good (redundant) backup, if anything digital is safer than paper. The best of the "fire resistant" boxes from the stationary store don't generally hold enough to be considered useful storage, and actually are only good - maybe - for about 500F for a half hour before the contents are pretty well destroyed. A "typical" house fire hits 1500 F or more for at least an hour. Don't believe anybody's advertising on those, since what they advertise is how long the box will last in a fire. Don't bother asking about the papers inside. I've built 'em and tested many of them. Far more "important papers" are lost to water damage or mold and mildew than to fires anyway, and those little boxes don't generally offer any protection even from the humidity inside that can make a moldy mess of everything. Some things, like car titles, deeds and mortgages, birth certificates, and (maybe even) divorce decrees and marriage licenses if you think they're important, are best kept in the original, but you still should have a digital copy as a backup. Most of the really critical things where an "original" might be wanted can be replaced with "certified duplicate copies" if you have the document numbers and official record keepers indentities to request them. A general rule might be "if it's not notarized you don't need the paper." You can apply - or ignore - that rule to suit yourselves. The things that take up the most space are the daily ledgers and tax preparation records, and since you're the only one who ever had them it's very important that you keep them safe. In most cases, the tax return alone won't answer any questions that will appear in a query or audit, and the most necessary things to have are all the bits and pieces of receipts and records you used to make the return. You cannot reconstruct how a tax return was prepared just from the return you filed (or even from the "worksheets" that tax prep programs save for you since they don't show individual items where they were entered), and the "how did you do it" is all the inquisitors will ask you about (at least in my experience in the US). Of course you do whatever makes you feel safe. It's difficult enough just trying to decide what's important enough to save at all, and most people won't be able to save everything they might think they should. One tech writer about a year ago was amazed at the appearance of one of the first reasonably priced 1TB hard drives, and calculated that one of those drives would hold "everything a person could possibly write in a lifetime with room to spare." I'm running 3TB internal in each of two machines, and keep alternating backups on 2 1TB externals for each machine - for the "important stuff" - and they're all getting sorta crowded. (Some "old archives" that I'd only need in a rare case are on separate (redundant) externals, and not even on the computers.) Obviously the writer didn't account for Microsoft "file bloat." John |
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Subject: RE: BS: don't de-clutter your financial files From: Pete Jennings Date: 13 May 13 - 09:28 AM JiK is right about digital storage: if the data is not on at least two independant storage devices, it's not data. |
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Subject: RE: BS: don't de-clutter your financial files From: GUEST Date: 13 May 13 - 12:40 PM and then you find that your new notebook has no usb ports. |
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Subject: RE: BS: don't de-clutter your financial files From: JohnInKansas Date: 13 May 13 - 03:19 PM A SPAM email just received offered me a free subscription to a new magazine called "Geek" > Complimentary Geek Subscription > Geek magazine includes features on every facet of geekdom, from movies, television, video games, tech, comics, music, gadgets, and tons more. Be in the know with your complimentary one-year digital subscription. This is for notebook, notepad, and all the other "new" device users. You may note that it says nothing about how to write books, keep records, manage spreadsheets, maintain archives, or any other useful thing you might do on a real computer. The name itself pretty much says it all, since no literate people ever used "geek" to describe what were perhaps more properly called "nerds." As used, either just meant "anyone who knows more than I do about something." As used by this magazine, maybe it means "anyone who only wants to know the same stuff all the other kiddies do." The correct usage for "geek" was what you call a carny worker who swallows live rats and bites the heads off of live chickens and other little animals, so maybe it could be applied to a few rock musicians. And maybe it's evolved enough by misuse to apply to "gadget" users. Why would you need to backup anything from a notebook? You can't do anything useful in any proper way on one, so nothing much worth saving should be on one, unless your playtoys are the only things you value. (Obviously, slightly sarcastic personal opinion.) John |
