What financial records do I need to keep?
Posted on 23/09/2018
Ever feel like you're drowning in a sea of paper? Tame the paperwork today and reap the rewards tomorrow.
Life can be complicated enough without all the administrative paperwork that often accompanies it. This is particularly true when it comes to your personal finances.
If stacks of old bank statements, utility bills, receipts, insurance and superannuation documents mean you can’t see the trees for the paper, de-clutter, simplify your finances and improve your quality of life today.
There are many good reasons to pare back on your financial record-keeping, including:
• Living in smaller dwellings means we have less space to store documents
• Saves time by making it easier to find what you need
• Helps your loved ones find relevant documents easily should something happen to you
• In the event of a home emergency, you can quickly find important documents you may want to take
• Makes your life easier at tax time.
What you need to keep
When it comes to identifying the documents you need to keep, considering your legal obligations is a good place to start.
The first of these is your annual tax return. In order to complete your tax return you'll need documentary evidence of:
• all payments you’ve received, such as wages, interest, dividends and rental income
• any expenses related to income received, such as work-related expenses or rental repairs
• the sale or purchase of assets, such as property or shares
• donations, contributions or gifts to charities
• private health insurance cover
• medical expenses, both your own and those of any dependants.(1)
You need to keep these documents for five years after you lodge your tax return in case you’re asked to substantiate your claims (2), and it’s also a good idea to keep your notice of tax assessments for five years. However, if you run a small business, the document requirements and time frames differ (3) – find out more at the Australian Tax Office (ATO).
The second category of documents are those related to property such as:
• property deeds
• home loan documents
• renovation approvals
• warranties relating to work undertaken.
Other documents to keep include (4):
• tax file numbers
• powers of attorney
• birth certificates
• death certificates
• marriage certificates
• immunisation records
• current insurance policies, such as your life, home and contents, and motor insurance
• your most recent superannuation statement
• any personal loan documents
• vehicle registration
• vehicle service history
• business registrations
• qualifications documents.
What you can throw away
There are some documents you can toss, and as a rule, once a document has been replaced by a newer version, it’s safe to dispose of the older copy.
There’s also no need to hang onto credit card receipts once you’ve reconciled them against your bank statements, unless they’re needed for warranties.
Credit card and bank statements should be retained for a year, while other household paperwork, such as utility bills, can be thrown away once paid, unless you need a copy for rental applications or you want to keep them to compare your usage over time.
The exception to these rules is if the documents are required for tax purposes.
General Advice Disclosure: This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, AMP Financial Planning and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.