Keeping Electronic Records

[plowjockey]

I love paying bills online, but notice that I'm getting less (nearly none) printed paper statements, any more, some of which these, I keep for tax purposes (including the possibility of audit), or cost tracking over time.

Before, these printed statements could be stored in folders, then dumped after several years ( If I cleaned out). Now, I notice if I go on line and look at past statements, they usually only go back a certain period of time - not always that far back. True, the purged records could probably be requested when needed, but it would be nice to have them conveniently available.

Considered periodically printing them out and store, but this seem like a waste, of time and paper. Some (many) online accounts now have the option to export, to a file (spreadsheet, text), so this seem like it might be a better option, to periodically do.

Anybody dealing with this, or have other ideas?

[Alice In TX/MO]

I asked my accountant AND my investment adviser about those scan and store electronic receipt storage devices. They BOTH said to stick with paper.

Electronic backups fail, the technology changes over time, and paper is (almost) forever.

What I'm planning is year end summaries, printed and stored. You could do this quarterly or monthly. Whatever works for you.

[Moboiku]

For every bill I pay electronically (as many as possible), I also get notified when a new statement is available. I login and download each and every statement and it is stored electronically just as I used to store paper statements. I.e., I create "folders" and "sub-folders" so that the statements are organized. I keep them basically forever, since they are always PDF's which take up very little space.

It is true that most companies only have the past x years worth of statements available. It is up to each individual to download their own statements and store them.

What I haven't done well is back up and I was just thinking about that the other day. I think I really need to back several years worth of statements up to a disk so that in the event my computer becomes inop, I won't lose all that data along with it.

[Earthling]

Certain types of statements only need to go back so far. Even income tax forms need to be kept just so long. Once a couple of years have passed, I see no need to clutter my life with information that is no longer relevant. Do I really need to see what my electric bill was two years ago? Nonetheless, we keep electronic records on the main hard drive and on a USB hard drive backup. They consist of pdf files and screenshots.

[farmerj]

tax records need to be kept for 3 years. Some financial records kept for 7 years.

I normally keep my records for as long as they are supposed to stay on my credit reports. Something you should check over annually as well.

All my electronic records actually get attached to the payment I have in Quicken. I also include the confirmation number in the memo field in the payment as well.

[Cookie2]

My laptop recently went into the "blue screen of death" mode. Thankfully I have been paying for an off-line back-up service so once I purchased a new laptop, recovering all those old files was relatively easy (just slow - it took days). My important pictures are backed up to Snapfish, too.

Still, because I pay bills on-line, I was handicapped for quite a few days. My budget is an Excel spreadsheet. My new laptop doesn't have Windows Office (yet - apparently I have to buy it - sigh) so I couldn't even get access to it. I didn't even know which bills were due! I was able to gain access to my e-mail via my smart phone so I could see when I got statements e-mailed to me but not all my utilities do that. I was also able to transfer my Quicken software to my new laptop. As a matter of fact, that was the easiest part of the entire process.

In terms of keeping records, consider what you really have to keep. I have a master binder of important papers - insurance policies, property titles, investments, etc. When I do my taxes, which are simple (we don't have anything to itemize), I slip all the supporting documentation into a big envelop, write the year on the outside and put those in storage. After 7 to 10 years, I shred the older envelops (although it is sometimes fun to go back and look at some of those numbers).

What else do I file? Very little. I have one file tote for every account I've ever had in my life - filed according to account number. That way if some odd account ever shows up on my credit report I can look it up to see if it is really mine. In that folder, I keep the opening documentation and the closing documentation but there is no need to keep the stuff in between.

As a matter of fact, my other "filing system" is a stack of paid bills. If I ever need to through the stack for a document, I can find it roughly in chronological order. Periodically I'll take the bottom of the stack and shred it. If I haven't needed it in 6 months or more, I probably won't.

I do keep most of our medical records but very little else. There simply is no need.

[Vosey]

While I pay almost all our bills through online banking I try to get the paper bills sent as much as possible. As long as they don't charge a fee for the paper bill I make sure I don't check the little box that says to send everything electronically. Companies make a huge deal about saving the environment by going paperless, I feel like they are guilting us into going paperless to save them money! And printer cartridges cost a fortune, I don't want to print all this stuff out.

Our accountant also said we needed the paper utility statements on our rental even though they keep trying to send them only electronically.

I am currently in this constant battle with our hospital and car insurance company to send us paper bills. The insurance company every year tries to send us our cards and bills electronically although I opt out every year. And if I pay medical bills through MyChart I don't get an itemized bill or anyway to print a receipt. It gets me ranting and raving!

[Danaus29]

I sure hope those who believe you need to keep your tax records only a few years never get audited. It says right on the website that if the IRS believes you tried to commit fraud (sure you tried to commit fraud, that's why the IRS is auditing you) they can go back FOREVER.

[farmerj]

Originally Posted by Danaus29

I sure hope those who believe you need to keep your tax records only a few years never get audited. It says right on the website that if the IRS believes you tried to commit fraud (sure you tried to commit fraud, that's why the IRS is auditing you) they can go back FOREVER.

Sorry, statute of limitation is 3 years.

http://www.irs.gov/irm/part25/irm_25-006-001r.html

[Danaus29]

Tell that to the veteran I met who was audited after he retired.

The Exceptions of 3-Year Statute of Limitations for Auditing your Tax Return:

• If you omitted income that adds up to more than 25% of income you reported on your income, then the IRS has six years from the date of file to audit your tax return and assess further taxes.
• The IRS also has six years to audit your tax return and assess further taxes if you have not included foreign financial assets.
• There is not a statute of limitations if you filed a false or fraudulent tax return. This means, if you lied and filed a false tax return, there is no limit to the period the IRS may audit you and assess further taxes.

From this site:
http://www.priortax.com/filing-late-...s-liabilities/

[farmerj]

sounds like the vet needed a better accountant.

They can also have the person SIGN a form WAIVING the statute of limitations. Then and ONLY then can they go back however far you need to go.

I have done the research. They don't have carte blanche ability to go back indefinitely.

Show the actual regulation that they do. Not some tax companies website for drumming up business.

In the mean time, I'll put more credence in the actual tax code than a business website.
http://www.law.cornell.edu/uscode/text/26/6501

[Alice In TX/MO]

My grandfather died in 1975. The black boots demanded that my grandmother (born in 1895) document stocks she inherited in 1920 were separate property and not subject to community property/inheritance laws.

The statute of limitations is moot when it comes to the IRS.

Cover your heiny.

[Danaus29]

Vet forgot to file the year he was drafted.

It's on the irs site. I've pointed it out before. Toss 'em if you want but even the irs says there is no limit if they believe you committed fraud.

http://www.irs.gov/irm/part25/irm_25...1r-cont01.html
The last time I'm ever pointing it out.

[mnn2501]

Originally Posted by farmerj

tax records need to be kept for 3 years. Some financial records kept for 7 years.
.

Actually that is not true. Any tax record must be kept as long as you own a property and are taking deductions from it.
(meaning homes, and any business equipment, rental properties, etc)

[ErinP]

Originally Posted by Danaus29

Tell that to the veteran I met who was audited after he retired.

The Exceptions of 3-Year Statute of Limitations for Auditing your Tax Return:

• If you omitted income that adds up to more than 25% of income you reported on your income, then the IRS has six years from the date of file to audit your tax return and assess further taxes.
• The IRS also has six years to audit your tax return and assess further taxes if you have not included foreign financial assets.
• There is not a statute of limitations if you filed a false or fraudulent tax return. This means, if you lied and filed a false tax return, there is no limit to the period the IRS may audit you and assess further taxes.

From this site:
http://www.priortax.com/filing-late-...s-liabilities/

Simple solution: Don't lie on your taxes and always file.

[Danaus29]

Doesn't always work that way. What if you make a mistake and the IRS waits 20 years to "correct" it? If you don't have your paperwork you can't defend yourself. Easier just to save the records. They don't take up that much space.

[rambler]

You folks don't file farm taxes do you.....

As others say, keep at least 3 years, but if there is an error they can go back an additional 3 years.

And if you are deducting a machine for 7 years, or a building or tile for 20 years, you better have proof of that deal for the full 20 years. Plus the 3 they can go back. Plus the 3 extra if they find an error. Making 26 years.


Now if you buy a tractor and deduct it, farm with it 40 years, and then sell it, the govt will want to know what you paid for it, and what you deducted on it, and figure out the salvage costs. So you better have kept that paperwork all 40 years. Plus the 6 in case they go back....

Breeding stock is another one, buy a heifer, breed it 10 years, sell it for hamburger, and you better have your purchase price records on that critter, IRS wants to know.

So, tossing all your receipts in a couple years could be some very bad, very expensive advice.

For folks with a 9-5 job, no owned real estate, then keeping it 6 years will probably work just fine.

I really like the paper record, print out the year end results from the electronic sites.

It seems any sort of electronic record is going to become obsolete in 15 years, can't be read any more.

I have some layout templates saved in 3.5 inch floppies in PageStream format, also in whatever the Microsoft program was of the day.... First I don't know where to stick a floppy any more, then the new software typically only goes back 5 or so generations of reading the file formats.

I've got emails from my sister and other family on Hotmail (whatever it changed to now, Live?) and how do I save those, every time Windows changes, the file format changes and can't access the old Hotmail files.

I have little faith in long term archiving of electronic records for the consumer. As a business where you hire a service, they can upgrade the files as they go, or invest enough to find comparable ways to read old records. As a. Individual, things just become outdated.

Paul

[ErinP]

What if you make a mistake and the IRS waits 20 years to "correct" it?

Then they're out of the statute of limitations...

[Danaus29]

Please reread the exclusions. In cases of fraud there is no statute of limitations. The IRS does not believe people can make simple mistakes. It's always fraud unless you can prove otherwise.

[farmerj]

wow....

talk about taking life literal.

So long as you are putting it on your taxes, keep it. If you are no longer claiming a deduction, 3 years. (or 6 your choice)

In the end it all comes down to using common sense. Apparently that's a little hard to cipher out here.