A Bank Statement is a record of the balance in a bank account, along with a list of amounts withdrawn & paid into it, provided by the bank to help the account holder(s) keep track of his/her finances.
Here are a few reasons why bank statements are important:
But it’s not that simple. There are various types of bank statements, presented by different banks, in different states & countries. Account holders need to abide by the different financial & regulatory guidelines presented to them across various parts of the world.
These include payment stubs, purchase receipts for day-to-day items, monthly account statements, credit card receipts, etc. These documents are essential to verify monthly expenditures & the accuracy of Form W-2 during tax season.
These include all kinds of utility bills (phone, cable, internet, electricity), business expenses (salary receipts, rent receipts, maintenance payments), etc. The general rule of thumb is to hold onto any & all documents that account holders might need to verify their annual tax filings. Account holders also have the option of discarding such physical receipts after securing confirmation of the payments for the bills.
Tax returns are important financial documents that describe a bank account’s monetary history. Account holders need to maintain a digital or physical record of their tax returns for at least 3 years. In case the account holder files for default payment (bad debt) or worthless securities, it is advised to keep the tax returns for up to 7 years.
It is also essential to maintain supporting documents of high-value transactions, to verify the sale or purchase as per the bank statement. These can include inheritances, brokerage receipts, tuition payments, donation receipts, etc.
Account holders that haven’t filed for taxes or have filed fraudulent returns should hold onto their bank statements & supporting documents indefinitely.
Some other documents that need to be held onto for more than 3 years include home & car insurance policies, employment tax records, home improvement records, etc.
GLOBODOX’s advanced organizational & search features move away from the traditional ‘folder’ storage approach & allow you to segregate bank statements into easily searchable groups, based on categories like bank’s name, statement’s date, amount, name of the product/service purchased, etc.
Another feature ‘Expiry Date’ lets users choose a date on which they would like the documents to automatically be moved to the system’s recycle bin, thus reducing clutter & decreasing the time it takes to manually find & delete old financial documents.
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