KEEP 3 TO 7 YEARS
Knowing that, a good rule of thumb is to save any document that verifies information on your tax return—including Forms W-2 and 1099, bank and brokerage statements, tuition payments and charitable donation receipts—for three to seven years.
To be on the safe side, McBride says to keep all tax records for at least seven years. Keep forever. Records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept indefinitely.
Once you submit the return, shred those stubs and statements. After filing, go back 3 years to shred the old tax return forms, W-2s, 1099s, K-1s, canceled checks, receipts for charitable contributions, and other information used in past taxes.
Keep them as long as needed to help with tax preparation or fraud/dispute resolution. And maintain files securely for at least seven years if you've used your statements to support information you've included in your tax return.
You should shred any mail you don't need to hang on to including bills, notices from the DMV, IRS, and Social Security Administration, etc. In fact, anything containing any personal information should go into the shredder if you don't need to save it. While this may seem a bit excessive, it isn't really.
Utility Bills: Hold on to them for a maximum of one year. Tax Returns and Tax Receipts: Just like tax-related credit card statements, keep these on file for at least three years. House and Car Insurance Policies: Shred the old ones when you receive new policies.
Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
But canceled checks that support your tax returns, such as charitable contributions or tax payments, probably should be held for seven years. And, you may want to keep indefinitely any canceled checks and related receipts or documents for a home purchase or sale, renovations or other improvements to a property you own.
Old insurance documents and paperwork contain sensitive data that can make it easy for identity thieves to violate your privacy, so avoid placing whole documents in your recycling or trash. Instead, shred documents using a cross-cut shredder (one that shreds in two directions, producing small, confetti-like pieces).
You do not need to retain old bills. Current insurance policies for building and contents. Outdated policies should be discarded. Warranties, manuals and receipts for household appliances or guarantees for home improvements should also be retained.
According to the IRS, it generally audits returns filed within the past three years. But it usually doesn't go back more than the past six years. Either way, it can be a good idea to keep any credit card statements with proof of deductions for six years after you file your tax return.
Is it safe to throw away old bank statements, or do you need to shred them first? According to the Federal Trade Commission, you should shred documents containing sensitive information, including bank statements, to protect yourself from identity theft.
What Receipts Are Safe to Throw Away? Experts in financial services and shredding businesses state that the only receipts that are safe to throw away are those that contain no personally identifying information whatsoever. Credit card statements, credit card receipts, bank statements, ATM receipts.
Because of the issue of identity theft, it is not safe to throw away receipts, junk mail, and other documents containing sensitive personal information. Identity thieves can rifle through your trash or recycle bin, steal your information, and use it to launch fraudulent and criminal attacks on you.
Just take it into your local bank and ask them to replace it. As long as you have at least half of the bill left, most banks will gladly exchange it for you.
Shredding is a common way to destroy paper documents and is usually quick, easy and cost-effective. Many retailers sell shredders for use within your office or premises, enabling you to shred and dispose of the documents yourself.
It is illegal for you to throw away mail that isn't addressed to you! If you have mail that isn't addressed to you, the best course of action is to take it to the post office or write “return to sender” on the envelope and place it back in the mailbox.
In general, 401k plan records must be kept for a period of not less than six years after the filing date of the IRS Form 5500 created from those records.
Like your mortgage payment statements, you should keep any paperwork on your refinance for at least 3 years. Although, some professionals might recommend keeping it for at least 10 years.
Some people recommend keeping checkbook registers for at least 12 months in case “issues” (questions about payment) arise and because some checks may take a while to clear.
If you have employees, including household employees, keep your employment tax records for at least four years after the date that payroll taxes become due or is paid, whichever is later. This should include forms W-2 and W-4, as well as related pay information including benefit forms.