We’re all encouraged to lead a paperless life, yet there are plenty of documents that we still need to keep. Let me list those that I am aware of:
- Tax returns. I save for seven years. Should you be audited by IRS, it usually goes back to three years, but if there are big issues, the Agent can look at six years worth of returns.
- ATM/credit card receipts. I normally shred them off after I received my monthly statement, balanced my checkbook, and received confirmation of any credit card payments. As for receipts for tax-deductible item, I file it for seven years with other tax information.
- Credit card statements. I keep them for seven years if there are tax deductible items. If they don’t, I shred them after a year.
- Monthly bank statements. I store them for seven years.
- Home improvement receipts. If you are paying for a mortgage (thankfully we’re not anymore) you should also keep them with all the receipts for as long as you own the house.
- Utility and phone bills. Keep them for seven years if you take a home office deduction. I don’t, so I just keep ours for one year.
- W-2 forms. Keep them for seven years.
Reminder: Do not just toss these documents in the trash, you must shred them.