What financial papers should you keep and for how long?
How long should you keep personal financial information? Here’s what the experts advise:
• • The IRS has three years from your tax-filing date to audit and six years to challenge a claim. A good rule of thumb is to keep all tax returns and supporting documentation for seven years.
• • Keep credit card statements for seven years if tax related expenses are documented.
• • Keep paycheck stubs for one year. Be sure to cross reference the paycheck stub to the W-2 form.
• • Keep bank statements and cancelled checks for at least one year.
• • Bills should be kept for one year or until the cancelled check has been returned. Receipts for large ticket items should be kept for insurance purposes.
• • Home improvement receipts should be kept for six years or permanently.
• • Items such as birth certificates, social security cards, insurance policies, titles or wills should be kept permanently in a safety deposit box.
If you are going to dispose of documents with sensitive information, be sure to shred them to ward off identity theft, experts advise.