As your paper and electronic documents begin to get overwhelming, you may wonder when you can destroy these items and what you should keep. It is critical to keep some documents while others can be destroyed after just a few years.
Generally, you should retain all personal documents that could be called into question if you were to be put under audit with the IRS. Some records should be kept indefinitely that relate to permanent transactions such as real estate, life insurance policies, etc. Review the guidelines below for more details.
Keep the following documents for a minimum of five years:
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- Medical Bills (in case of insurance disputes)
- Credit Card Statements
- Expired Insurance Policies
- Utility Records
Keep the following documents for a minimum of seven years:
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- All Documents Related to Tax Returns
- Medical Bills (if tax-related)
- Accident Reports and Claims
- Real Estate Records and Receipts for Improvement
- Sales Receipts (or no less than the life of the warranty)
- Wage Garnishments
- Other Tax-Related Bills
Keep the following documents in a permanent file indefinitely:
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- Income Tax Returns
- Income Tax Payment Receipts and/or Cancelled Checks
- Retirement/Pension Documents
- CPA Audit Reports
- Legal Records
- Important Correspondence
- Investment Trade Confirmations
Other Documents
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- Pay Stubs (keep until reconciled with your W-2)
- Credit Card Receipts (keep until verified on your statement)
- Insurance Policies (keep for the life of the policy)
- Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
- Real Estate Records / improvement receipts (keep 6 years beyond sale of property)
- Stock and Bond Records (keep for 6 years beyond selling)
