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By John Wolf
World Health Organization
To prevent infection and to slow transmission of COVID-19, do the following:
- Please wash your hands regularly with soap and water, or clean them with an alcohol-based hand rub.
- Maintain at least a 1-meter distance between you and people coughing or sneezing.
- Avoid touching your face.
- Cover your mouth and nose when coughing or sneezing.
- Stay home if you feel unwell.
- Refrain from smoking and other activities that weaken the lungs.
The current lockdown can be the time to organize all the documents in your drawer for the right time to put them in order.
About your financial record
You need to enlarge a habit of good record keeping by retaining your expenses while they’re still fresh in your mind. That will ensure claiming all legitimate tax deductions; regardless of the small conclusion, they will add up over time and save you big tax time. You must keep track as you move along daily to save time and trouble when preparing for tax time. Also, if you ever get audited by the IRS or state government, accurate records are what you’ll rely on to back you up. Besides, your records are a great way of determining whether your assets are creating income for you and how much.
Which documents to keep
One of the tricks of record-keeping is knowing which ones to keep and pitch. Not every pay stub, invoice, or bank statement will reveal your financial circumstance or show you the direction you are heading. You must collect and examine the correct records for your financial circumstances.
There are four categories of records you will need or should keep, these are:
- Tax records
- Income
- Expenses
- Miscellaneous
You may be saving these already or some of them. You’ll need to take the time to organize them properly.
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Income Records
Save pay stubs and annual income statements for 3 to 4 years. Business owners save their income-related documents for five years. Save your monthly bank statements as proof of deposits and track any interest you earn. If you own stocks, bonds, or mutual funds, retain these statements for your broker and save them for as long as you own the asset and four years after the year you dispose of the related asset. These assets include monthly statements and confirmation slips verifying your orders to buy or sell securities. Record the name of each stock and mutual fund you own, along with the number of shares purchased, the date and price of purchase, and the date and price if you decide to sell. You may need to report and pay tax on capital gain each year. Keep your Social Security statements that the administration sends you. Save all annual ideas from retirement plans such as 401(K), IRAs, and pension plans. Create a list of all your properties, like jewelry, silverware, etc.
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Tax Records
Hold onto your tax returns and all supporting paperwork for at least 2 to 3 years after the year you file. Save your tax return for any year in which you calculated a deferral of gain or established a value for an asset. If you sell a home and buy another, you may be allowed to defer the gain from the sale of the first home; you will need to keep records that track the value you’re currently using. Save all receipts from home improvement; you will need these to defer some of your tax burdens if you sell your home for a profit. Save all canceled checks for state and local income tax and any property you pay taxes on. These are deductible on your return. You can deduct and contribute to charity, so keep these records also.
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Miscellaneous Documents
Personal documents like birth certificates, marriage certificates, divorce decrees, passports, and military enlistments should be saved for as long as you live. Keep a copy of all insurance policies, including life, auto, and health. Keep original copies of legal documents like your will, power of attorney; living will, or trust.
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