The most difficult part of cleaning out your files is determining what to keep and what to shred. To help in your decision making, we suggest you ask yourself the following questions:
Does this document contain information I will need some day?
Will I ever need the document to defend a tax deduction, contract or warranty claim?
As you tackle this year’s filing cleaning, we have provided some general guidance for how long you should retain certain documents. If you have specific questions about a document, we recommend you check with your accountant and/or attorney first.
Toss Now
As a general rule, documents which do not have a tax impact or represent important assets do not have to be maintained and can be shredded once they have been verified and reconciled.
Examples include:
Credit card statements and receipts
Investment confirmations once they have been verified with investment statement
Deposit and ATM receipts
Cancelled checks and bank statements (be sure to keep those for major purchases and tax deductions)
Medical Bills/Insurance Payments
Utility bills – recommend keeping one, to provide easy access to account number and contact information
Pay stubs
As Long As You Need It
Documents relating to purchases, improvements and tax returns for important assets, like real estate, should be kept until the asset is sold plus three years.
Records relating to investments, IRAs and retirement plans should be kept until the transaction has been fully completed and/or all funds have been withdrawn (if your annual brokerage statements list the year’s transactions, there is no need to keep monthly or quarterly statements)
Insurance contracts and beneficiary designations should be maintained as long as they are still in effect
Warranties for appliances and vehicles should be kept as long as an item is still owned
Keep Forever
Adoption and child custody records
Certificates, birth, marriage, death
Citizenship or Naturalization documents
Family health and immunization records
Legal documents, wills powers of attorney
Passport
Receipts for major purchases
Real Estate deeds and titles
Separation and/or divorce records
Social Security cards