As part of my effort to organize myself for the New Year, I’ve found that I’m starting to become a pack rat with papers.

While I was busy purging paper and backing up the electronic data, I realized that when we don’t know how long to keep something, we end up keeping it forever… or not at all. Here’s how long we should be keeping those important papers:

Forever

  • Birth Certificates
  • Marriage Certificates
  • Divorce Certificates
  • Death Certificates
  • Military Documents
  • Immunization Record
  • Employment Records (Why)
  • IRA Contributions (Why)
  • Social Security Card
  • Tax Returns: The IRS can audit your returns from 3 years ago; 6 years if you grossly under reported; indefinitely if you filed a fraudulent return or did not file. So you could pitch your returns after 7 years… however, if they claim you didn’t file, and you pitched it… well, now you know why I put tax returns on the indefinite list! You can also request copies or transcripts of past tax returns. For more details on how long to keep tax records, see how long to keep tax returns.

Keep During Ownership

  • Car Titles and Service Records
  • Receipts, Manuals, and Warranty Information for Appliances
  • Receipts for Major Purchases like Jewelry, Furniture, and Computers

Ownership Plus 7 Years

Even after you sell investments or real estate, you’ll still need to keep the gain or loss documentation for tax purposes.

  • Stocks, Bonds, and Investment Records
  • Savings Certificates
  • Home Improvement Documentation
  • Real Estate Records

7 Years

Many of the following will contain information that supports tax returns. Therefore it’s best to keep the following for seven years:

  • Canceled Checks
  • Credit Card Statements
  • Old Bank Statements
  • Retirement Plan Contributions
  • Supporting Documentation for Tax Returns

Until Specified Date

  • Annual Retirement Statements: Until retirement and funds are exhausted.
  • Insurance Policies – Until property is sold, policy expires, and all claims are settled.
  • Wills: Until replaced by a new one.

Throw Away

  • Receipts not used for Warranties, Taxes, or Insurance
  • Paycheck Stubs: Once you get your W-2, you can toss them
  • Phone Bills not needed for taxes
  • ATM Receipts
  • Grocery Receipts





You can get my latest articles full of valuable tips and other information delivered directly to your email for free simply by entering your email address below. Your address will never be sold or used for spam and you can unsubscribe at any time.

Email:

Comments to How Long Do We Really Need to Keep Those Papers?

  1. Though companies offering retirement plans are now in the minority, if one has ever been employed via a company providing a “defined pension plan” & departed prior to taking retirement (even after having worked as little as 5 years), you may need proof of employment, obtainable only via those W-2′s to provide proof of employment. WHY? Records often get lost, sent to storage/warehouse, so no record available on your employment. WHEN CAN YOU COLLECT? Generally @ 59 1/2, 62, 65 – check with Employee/Human Relations dept.

    Sadie

  2. @ Sadie: Thanks for the reminder on the defined benefit plans!

    @ Craig: Great link with a lot of details on why things should be kept. They had some good ones on there: loan agreements, adoption records, and deeds. If anyone has these, check out how long they should be kept. Thanks for sharing!

    Madison

  3. Madison, consider the number of “young employees”, who spent just a few years at many of the major companies providing defined benefit plans which promised “vested benefits” and the employees either never recognized or forgot benefits available to them in their old age or if they remembered had difficulty proving their work history.

    It took about 4 yrs to obtain vested benefits for hubby; as he was not a long-timer & though minimal rec’d monthly, over 10 yr period certainly adds up. Fortunately I still had
    W-2 records from 30+ yrs ago plus an executive who verified his employment.

    SAVE THOSE W-2 RECORDS if applicable to you & don’t give up!

    Sadie

  4. there is a difference between retaining actual documents and copies. marriage certificates, titles, birth certificates, etc you need to retain permanently because copies aren’t legal for those. however, having an electronic copy pdf and printing if the original is lost or destroyed helps to get one quicker. the other stuff takes no effort or space or clutter if you scan and save electronically.

    Tim

  5. I’ve actually gone paperless with most of my bills.
    Sadly, credit card companies still have to send a paper copy, which is annoying.
    I’m considering scanning all my paper records … just getting tired of the paper.

    TStrump

  6. While my comment is slightly off topic, since it is tax time the length of time to save tax records caught my eye. I was reminded of some advice I got not too long ago from my tax guy:

    If you are ever audited, the audit will be for a specific tax year. During an audit, NEVER hand over tax records to the IRS for any year other than the specific year they are auditing you for (even if you have those records). Example: If you are being audited for your 2007 return, and they want to see information on your 2006 return, they are required by law to audit you for 2006 as well. Otherwise, a polite no will do the trick and is your legal right.

    Phil

  7. What Phil said.

    If the audit notice specifies items on your 2007 return, it will then state at the bottom something to the effect of “please bring 2005 & 2006 returns as well” – essentially any return still in the 3 year limit.

    EVERY audit book I’ve read tells you to “forget” to bring returns for prior years when they do not have items specifically under audit.

    Those books note the auditor does not have easy access to returns not specifically under audit – so don’t make it easy for them to go on a “fishing expedition”

    BTW, it is rare to go beyond the 3 year limit since that requires underreporting income more than 25% – that’s a difficult burden of proof for the IRS to meet.

    Bill

  8. You have classified the documents well. I follow your classification quite closely. On the 7 years and ownership + 7 years things, I try to keep the reference numbers. I presume (have yet to be tested) that the companies should have the records and better storage facilities.

    Regards

    fathersez

  9. keep your records as long as you can ..i just got nailed for embezzlement because I do not relate records from 1999

    Dick Fidlei

  10. hello question my husband brought me a diamond watch and ring from this well known jewelry store my husband dies 2 1/2 years ago in may sum1 breaks n our home and steals me jewlery store tell me they cant help my in retaining the proff off sale i thought a business is suppose to keep proff of sale or sale invoices helpppp

    Tia Pendergrass

  11. I really need to work on this as I’m one of those that keep a lot of papers.

    Linda


Powered by sweetCaptcha




Previous article: «
Next article: »

Barclaycard Arrival 2% Cash Back & $400+ Sign Up Bonus

The Barclaycard Arrival card just doubled their sign up bonus for a limited time!...

Close