Keep or Toss? A Quick Guide to De-Cluttering Papers!

by Janice Forostiak, Marketing Department


Are you ready to de-clutter? Tax prep time is prime time for tossing old paperwork you no longer need. We all tend to be paper hoarders at times, but even the most diligent record-keeper can get out of control. So, the $64,000 question remains: How do you know what to keep or toss? Here’s a handy guide to get you started:

KEEP UNTIL WARRANTY EXPIRES OR CAN NO LONGER RETURN OR EXCHANGE
• Sales Receipts: Keep 3 years for tax purposes

KEEP FOR 1 MONTH
• ATM Printouts: Throw out ATM receipts after balancing account

KEEP FOR 1 YEAR (Unless needed for tax purposes and then you need to keep for 3 years.)
• Paycheck Stubs: (Dispose once you have compared to your W2 & annual social security statement)
• Utility Bills: Dispose after one year, unless you’re using these as a deduction like a home office then you need to keep them for 3 years after you’ve filed that tax return.
• Cancelled Checks • Credit Card Receipts • Bank Statements • Quarterly Investment Statements: Hold until you get your annual statement.

KEEP FOR 3 YEARS
• Income Tax Returns: Keep in mind that you can be audited by the IRS for no reason up to three years after a tax return is filed. If you omit 25% of your gross income, that goes up to 6 years; and if you don’t file a tax return at all, there is no statute of limitations.
• Medical Bills and Cancelled Insurance Policies
• Records of Selling a House Documentation for Capital Gains Tax
• Records of Selling a Stock Documentation for Capital Gains Tax
• Receipts, Cancelled Checks and other Documents that Support Income or a Deduction on your Tax Return: Keep 3 years from the date the return was filed or 2 years from the date the tax was paid – whichever is later.
• Annual Investment Statement: Hold onto 3 years after you sell your investment.

KEEP FOR 7 YEARS
• Records of Satisfied Loans • Contracts • Insurance Documents • Stock Certificates • Property Records • Stock Records • Records of Pensions and Retirement Plans • Property Tax Records • Disputed Bills: Keep until the dispute is resolved. • Home Improvement Records: Hold for at least 3 years after the due date for the tax return that includes the income or loss on the asset when it’s sold.

KEEP FOREVER
These documents should be kept in a very safe place, like a safety deposit box.
• Marriage Licenses • Birth Certificates • Wills • Adoption Papers • Death Certificates • Records of Paid Mortgages