Permanent records that should be kept forever include vital personal documents (birth/death certificates, Social Security cards, marriage/divorce papers, passports), property deeds, wills, and estate planning documents. Other essential records to keep indefinitely include military discharge documents, records of major financial investments, and annual tax returns.
Documents that define your personal and financial life—like your birth certificate, marriage license and tax returns—should be kept forever. Hold on to records that support information on your tax returns for seven years. Digitizing and shredding your paper documents can cut the risk of fraud and identity theft.
Keep Forever
Birth certificate or adoption papers. Social Security cards. Valid passports and citizenship or residency papers. Marriage licenses and divorce decrees.
You need to keep tax-related documents, bank/credit card statements, payroll records, sales records, and investment purchase/sale slips for 7 years to cover potential IRS audits, while records supporting tax deductions (like receipts, bills) should also go with your tax returns for that period; however, tax returns themselves and certain long-term asset records might need to be kept permanently.
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.
How far back can the IRS go to audit my return? Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don't go back more than the last six years.
Basic rule: Keep tax returns and records for at least three years. The statute of limitations for the IRS to audit your return and assess taxes you owe is generally three years from the date you file your tax return.
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 an old document that isn't mentioned above, Mendelsohn said, you're probably safe following the seven-year rule. There are exceptions. If you own a business, failed to file a tax return or get sued, you may wish you held on to every shred of associated paper. Otherwise, it can probably go.
Documents you can toss after one year
The biggest tax mistakes people make include filing late, math errors, incorrect personal info (like Social Security numbers), forgetting deductions/credits (like EITC), misreporting income, not signing forms, and making errors with bank details for direct deposit, all leading to delays, penalties, or missed savings, with using tax software or professionals helping avoid these common pitfalls.
Suze Orman's four must-have legal documents for financial protection are a Will, a Revocable Living Trust, a Durable Power of Attorney for Healthcare, and a Durable Financial Power of Attorney, with an Advance Directive (like Five Wishes) often combined with the healthcare POA to specify medical wishes, ensuring your assets and care are handled according to your wishes, especially if incapacitated, and avoiding family conflict and costly probate.
Other records
After paying credit card or utility bills, shred them immediately. Also, shred sales receipts, unless related to warranties, taxes, or insurance. After one year, shred bank statements, pay stubs, and medical bills (unless you have an unresolved insurance dispute).
4 Types of Documents to Shred
Here's a list of the most important documents you should file away for future reference.
Don't toss the junk mail in the trash bin; shred it. Given merely your name, address, and a credit offer, someone could take out a line of credit in your name and spend money, leaving you on the hook.
You need to keep records related to your personal or business tax returns. The statute of limitations to examine your return and mail a Notice of Proposed Assessment (NPA) adjusting your return is usually 4 years from the due date of the return, or the date the return is filed.
Of course, there are some important documents you should never shred, such as:
Credit card and bank account statements: Save those with no tax return usefulness for about a year, but those with tax significance should be saved for seven years.
The easiest and most efficient way to get rid of your checks is to shred them. If you have a motorized shredder at home, you can easily shred many checks at once. Some banks or local businesses also offer shredding services if you don't have one handy.
Save your Medicare Summary Notices and related statements until they are no longer useful. But, don't just throw them in the trash-- be sure to shred them. Shredding important documents like your MSN and other health care bills will ensure that thieves cannot get their hands on your private information.
Based on the three-year rule, in late April 2025, you'll generally be able to discard most records associated with your 2021 return if you filed it by the April 2022 due date.
The 7 year rule
No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. This is known as the 7 year rule.
Keep Forever