Sherry Littlejohn: Hi! I'm Sherry Littlejohn with Wells Fargo and Company. Today we're talking about why you should save important records and documents. We all have documents we cannot live without. Damage to or loss of documents containing important personal information can be devastating, no matter if it's at work or home. Since accident and emergencies do happen, you should always have a reliable backup plan. This means keeping copies of key documents on hand in case of unforeseen emergency.
There are many ways you can keep digital copies of your most important records safe, secure, and readily available. In the case of some vital documents, you need to secure them in a safe fire-protected location.
The originals of passports, driver's licenses, and citizenship identification records need to be kept permanently. You also need to protect the original documents for trusts, wills, contracts, property deed, birth and marriage certificates, and stocks and bonds. There are many reasons to keep records.
In addition to tax purposes, you may need to keep records for insurance purposes or for getting a loan. Good records will help you identify sources of income. You may receive money or property from a variety of sources. Your records can identify the sources of your income. You need this information to separate business from non-business income and taxable from nontaxable income.
You also need to retain receipts and other documentation of expenses. You may forget an expense unless you record it when it occurs. You can use your records to identify expenses for which you can claim a deduction. This will help you determine if you can itemize deductions on your tax return.
You should also keep records to show the basis of your property. You need records to prepare your tax return. Good records help you to file quickly and accurately and help you keep track of your financial goals.