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How Long to Keep Old Papers and Records

Please use the following as a rough guideline only - consult your accountant or attorney for specific advise.

Shred it

While weeding out old files it is a good idea to shred anything with a birth date, signature, account number, password or social security number to help prevent identity theft.

Documents to keep indefinitely

Birth certificates, Marriage certificates

The Social Security Administration wants to see your birth certificate and marriage and divorce dates when you go to sign up for Social Security.

Insurance policies

I'm not sure how long these should be kept. I'm keeping mine for at least 5 years beyond their expiration date. I think the idea here is to have evidence of the insurance in effect at the time if a claim should need to be filed long after an event. I don't know the statute of limitations regarding the filing of such claims and I suppose it may be different for different circumstances.

IRA contributions

Keep records of IRA contributions permanently. If you made a nondeductible contribution to an IRA, keep the records indefinitely to prove that you already paid tax on this money when the time comes to withdraw.

Retirement and savings plan statements

Keep the annual summary statements until you retire or close the account.

Brokerage statements

Keep them until you sell the securities and file your taxes. Then keep them with the tax return. You need the purchase/sales slips from your brokerage or mutual fund to prove whether you have capital gains or losses at tax time.

House records

Keep all records documenting the purchase price, purchase expenses, legal fees, etc, and the cost of all permanent improvements over the years (things such as remodeling, additions, etc; everything that might lower your capital gains tax when you sell). After you sell these records can be kept with the supporting documents with your tax return.

Income tax related records.

When I went to apply for Social Security I discovered it can be important to have a lifetimes Federal income tax returns available to check the Social Security Administrations calculations. I had tossed some of my earliest returns and had to rely on the accuracy of their records. Fortunately they looked ok.

It's a good idea to keep the entire return and all the supporting documents (canceled checks and receipts for alimony, charitable contributions, mortgage interest and retirement plan contributions, etc) for seven years. After seven years it's probably ok to keep just the basic Form 1040 and toss the rest. Unless of course those returns contain tax related stuff that is still ongoing, like installment sales, loss carryforwards, etc. which are items on returns not yet seven years old.

Generally the IRS has three years from your filing date to audit your return ( six years if it thinks you underreported your gross income by 25 percent or more - there is no time limit if you failed to file your return or filed a fraudulent return) and you have three years from your filing date to file an amended return.

Documents to keep a year or so

Retirement and savings plan statements

Keep the quarterly statements from your 401(k) or other plans until you receive the annual summary; if everything matches up, then shred the quarterlies and keep the annual summaries until you retire or close the account.

Bank records

Go through your checks each year and keep those related to your taxes, home improvements, mortgage payments, stuff with warranties, etc. Shred those that have no long-term importance.

Bills

Go through your bills each year. In most cases, when the canceled check from a paid bill has been returned, you can shred the bill. Bills for big purchases -- such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. -- should be kept in an insurance file for proof of their value in the event of loss or damage.

Credit card receipts and statements

Keep your original receipts until you get your monthly statement then shred the receipts if the two match up. Keep the statements for seven years if tax-related expenses are documented.

Paycheck stubs

When you receive your annual W-2 form from your employer, make sure the information on your stubs matches and if it does, shred the stubs. If it doesn't, get a corrected form, known as a W-2c.

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