Shred It Up: Which Financial Docs Can Go Now
Staff Writers | MainStreet.com
Knowing how long to keep an important financial document is the key to maintaining your personal security as well as managing clutter. Some documents can be shredded after short periods of time, while others should be kept indefinitely. Here’s a handy guide to help you figure out what to keep and what to shred, beginning with the short-lived documents:
Keep for 45 Days
• Credit card receipts. Once the bill comes, you can shred these unless they will be deducted at the end of the tax year.
Keep for One Year
• Non-permanent bank records such as retail, utility and personal expenses that are not tax-deductible.
• Brokerage statements from active securities to show capital gains and/or losses at tax time.
• Utility, credit card and other bills can be shredded after one year for anything except large purchases.
Keep for Seven Years
• Tax documents, including tax returns, canceled checks, receipts and records for tax-deductible items like alimony, charitable contributions, mortgage and student loan interest, retirement plan contributions, etc. NOTE: The IRS has three years from the date you filed to audit your returns if they suspect errors. You also have three years to amend your tax returns if you find an error on your part or receive additional documentation. The IRS also has six years to challenge your return if you underreport your gross income by more than 25 percent, so be sure to keep all W-2s, 1099s and other income reporting paperwork.
• Credit card statements
• Housing purchase documents and related paperwork