Tax Season Tips: What Homeowners Should Keep or Toss
If you’ve owned your home for a few years, chances are you have a drawer, closet, or filing cabinet filled with paperwork you’re hesitant to discard.
You know the kind of paperwork I’m talking about—old utility bills, appliance receipts, mortgage statements, warranties for things you no longer own, and somewhere in the middle, the paperwork you’ll genuinely wish you could find when you need it!
While tax season is a great opportunity to organize your financial records, I believe it’s also an ideal time for homeowners to establish a simple “home file”—a designated space for the crucial information that narrates the story of your house.
This is because when you eventually sell, refinance, renovate, or even have an insurance claim, those records can suddenly become highly valuable.
Here’s what I recommend keeping—and what you can probably safely shred.
Keep Your Home Purchase Records
If you own your home, there are a few documents I would never discard.
Keep your closing statement, deed, purchase documents, survey, and records detailing the amount you paid for the property.
These documents provide essential information about your ownership and may be required years from now. You may not review them frequently, but when you need one, you want to know exactly where it is.
I suggest keeping both a secure digital copy and the original paper documents.
Keep Records of Major Improvements
This is one of the most significant categories homeowners often overlook.
Have you replaced the roof, installed new windows, remodeled the kitchen, finished the basement, added a deck, replaced the HVAC system, or done any other major renovations?
Keep the paperwork.
Save invoices, receipts, permits, warranties, and contractor information for major improvements. These records serve as documentation of the work you’ve done and can be useful when selling the home, dealing with an insurance company, or simply trying to recall the year that new water heater was installed!
And don’t underestimate the value of a simple list.
I’m a big fan of keeping a running home improvement timeline for each project. This includes the project date, contractor, and approximate cost. Ten years from now, you won’t have to rely solely on your memory to answer questions like, “When exactly did we replace that roof?”
Don’t forget to keep the warranties for major appliances and home systems. These documents are valuable and should be kept for as long as the warranty is active.
Consider items like HVAC systems, water heaters, appliances, roofing, windows and doors, generators, plumbing or electrical work, and major renovations. When a repair is needed, you’ll be grateful for the warranty information.
Once a warranty expires, you can generally move the paperwork out of your active files unless it relates to a larger home project or may be useful for future reference.
Another habit I recommend every homeowner adopt is creating a simple document with the basic facts about your house. This document should include information like the roof’s installation year and contractor, HVAC system’s installation year, model, and service company, water heater’s installation year and model, paint colors for each room and paint names, appliance model numbers and purchase dates, landscaping irrigation company and major plantings, and security alarm company and equipment information.
You don’t need to make it fancy; a simple spreadsheet or digital document will suffice. This cheat sheet can be incredibly handy when something breaks or when you’re getting ready to sell your home.
Finally, consider reclaiming some filing cabinet space by keeping only the necessary financial paperwork. Routine bank statements, credit card receipts, utility bills, and other everyday financial documents generally don’t need to be kept permanently once you’ve reconciled them and determined they aren’t needed for tax, business, warranty, or other purposes. The same goes for expired warranties and receipts for ordinary purchases you aren’t going to return.
Remember to shred any documents containing sensitive personal or financial information. Also, don’t forget to keep digital records, as your computer’s Downloads folder isn’t a proper filing system.
Before embarking on any remodeling, renovation, or significant changes, take photographs of your home’s current state. Capture images of the rooms, major systems, and the exterior. Save these photos alongside your project records.
While it may seem unnecessary at the moment, these photos can be invaluable for insurance documentation, future renovations, and even helping potential buyers understand the improvements you’ve made.
Plus, let’s be honest—sometimes it’s simply enjoyable to reminisce about the state of your kitchen before you finally replaced those cabinets!
Your home is one of your most valuable assets. The primary objective of this organization is to understand what you own and maintain a record of any modifications you’ve made to it.
Your home is not just a place to live; it’s likely one of your largest financial investments. Keeping meticulous records is an essential part of being a responsible steward of this investment.
As you tackle the piles of paperwork this year, don’t solely focus on taxes. Consider the future of your home.
Create a secure location to store your purchase documents, improvement records, warranties, and other important home information. This will save you time and effort when you need to find specific documents or when it’s time to put up a “For Sale” sign in your yard.
When the time comes to sell your home, North Atlanta Home Group is here to assist you in determining its value, identifying the most significant improvements, and making informed decisions about your next move.
With over 30 years of experience, we’ve been helping North Atlanta homeowners navigate their real estate journey.
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