What financial papers should you keep and for how long?

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.

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