How Long Should You Keep Receipts
Some people, especially old ones, are fond of keeping receipts. Keeping receipts is a good habit but how long should one keep a receipt? The length of time by which any receipt will be kept depends on the kind of bills that were paid. Having lot of receipts in your drawer can result in clutter and disorganization. Its better to figure out which one are more important. Rest of them can be trashed. Here are the bills that you usually have to and the length of time for you to keep them.
Type Of Receipts
- Receipts of Income Tax
Receipts for income tax payments and other bills related to it must be kept for three years. The Internal Revenue System conducts audit every three years. It will be at your advantage to keep receipts that are vital for your tax deduction as well as credits that you have availed in your tax. Not having these receipts to show when paying your taxes will disallow you exemptions that you are entitled to. You will lose a sizable amount of money just because of your negligence in keeping all your receipts.
Your receipt for your water and electricity bills must be kept for at least a year. In case there are discrepancies later on, like an overpayment or an underpayment, you can easily find support to your claims. These receipts are important when settling problems with regards to bill payments.
Students and parents must keep receipts of all payments paid for school fees. Keep your receipts until the time that you graduate so that if there are any errors in recording your payment, you can easily have proof of the payments that you have made. Receipts for miscellaneous fees, books and everything that are paid in school must be kept for future reference.
There are instances when a student is already about to graduate and some discrepancies on payments are discovered. Without your receipts as proof of payment, you might be forced to pay again those fees that appear as unpaid in the school records.
Appliances, furniture and other gadgets are considered as major purchases. These items come with warranties. However, if you cannot present a receipt, you cannot avail of the warranty either. In case
you discover defect on the device, you cannot have it replaced or repaired for free because you cannot present proof that you have personally purchased the item.
This results to your being denied a privilege that you could have enjoyed if you have kept your receipt. Therefore, it is advisable to keep receipts for such major purchases for much longer time, preferably till your product is under warranty.
You can keep receipts for minor purchases for at least a week. There are stores that allow you to replace a defective product for as long as you go back to the store and surrender the item within 24 hours of purchase. Some stores could accept return or exchange a week after the product has been bought. However, the policy varies from store to store.
- Receipts for insurance policy payments
An insurance policy is very important to you. To prevent any problems when making a claim, your payment receipts must be kept intact. Some insurance policies would not pay you if you miss even just one premium payment. Having your receipts with you will always prove that you have satisfied the contract by paying your dues regularly.
Credit card payment receipts should be kept until and unless you get a final confirmation from the credit card company over email or SMS that they have received the amount due to them. Once received, you can trash them. Moreover, if you need them in future, you can always get them by logging on to the website of the company and can download from there, in case your are not getting your monthly statement.
- Receipts for mutual funds
You can keep receipts with you until you sell your mutual funds. Plan to have it with you for at least an year. You might need them in the year end to give it as an evidence to the taxing authorities to show the savings.
So, every time you make payment and receive a receipt, do not crumple that small piece of paper. Keep it because you might need it sooner or later.