Drowning in Paper
Our monthly Brokerage Account statement is the size of a small book. I still like getting the paper statement but we are running out of room to store them. At tax time every year we receive the usual 1099 form and it summarizes all sales and records all distributions for the year. However that is only done for taxable accounts – NOT tax defered accounts. Therefore the only record we have of dividends paid, sales, and purchases inside the IRA and Roth accounts are these monthly statements. But will I ever really need that information? If I understand things correctly, when we take distributions form an IRA, we will pay taxes on whatever amount as if it was regular income (and we’ll not owe anything on Roth distributions). Do I have that straight? Can we get rid of all those monthly statements?
Permalink Submitted by Alan Spross on Mon, 2011-03-21 19:17
Yes, you have it right and you CAN get rid of all those monthly IRA statements. You may even be better off going paperless on the IRA accounts altogether. Most brokerages where you have on line access allow you to pull up old statements on line if you ever need the info. For IRAs, the year end 5498 forms and your 8606 forms are what you really need to retain in some organized fashion since they relate directly to reporting distributions on your tax returns.
In recent years that have been several class action suits involving various trading and other infractions where you may be asked to document your holdings as far as 10 years back. In those few cases, you can usually get the help you need from the broker who has kept all this info. Of course, if you changed brokers alot, this job would be much tougher though.