The Paper Chase

Finding that important document doesn't have to be an ordeal.

Be Ellie Kay

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"Where's my fabric cutting board, sweetheart?"

Silence.

"Is that the big, bulky cardboard thingy that you keep under the bed?" Jim asked, slinking into the living room.

Joyce clenched her teeth. "Yes."

Jim shuffled his feet. "I gave it and a bunch of other stuff to the Vietnam Veteran's Association while you were at that ladies retreat last month."

Jim was a neat freak.

Joyce was not.

She didn't mind a bit of clutter here and there and liked to hang on to things in case "she might need them one day."

Jim learned to be excessively tidy when subjected to surprise inspections in the Army. He often threw or gave things away, not understanding the need to keep them—even financial records. If the bank account balanced, he'd discard the statement. If the credit card bill checked out, he tossed all the paperwork. Once, when the couple needed some tax returns for an adjustment credit, they didn't have them. Jim had thrown them away because "they were two years old."

When it comes to financial records, many may share Jim's sentiments—they want to get rid of that extra paper. Some homes become a firetrap with piled up records, others a document trap where the couple can't find anything without digging through warranties from electronics they haven't owned for years.

By burying themselves in paper and print, couples can set themselves up for extra stress. But there is a way to get rid of that extra padding by following two basic rules that apply to streamlining excess paper:

1. No matter what filing system you use to organize important documents, it's imperative that you as a couple set up a system that works.

2. Shred financial documents before you discard them; don't set yourself up to be a victim of identity theft.

Part of Jim's problem was that he didn't understand why he needed to keep certain records but could discard others. Here's a neat-freak friendly guide to understanding why some records should be kept so they're easily located when you need them.

Tax records.

The rule of thumb is to keep tax records for at least six years. "If there is an underreported income, the irs can go back six years in its audit," says Phil Beasley, spokesman for the Internal Revenue Service in Dallas.

Receipts, canceled checks, and other documents that support an item of income, a deduction, or a charitable donation should be kept until the statute of limitations ends for that return. That date is usually three years from the date the original return was filed or two years from the date the tax was paid, whichever is later.

Real estate.

Keep any records that determine the basis of the property. The basis is the original cost of the home or property and is used to determine a gain or loss when the property is sold. It's also used to determine the depreciation if the home is used in part for business purposes or rent.

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Originally published in: Marriage Partnership, 2005, Winter, Page 52

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