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What Papers Should You Keep?

When can you safely get rid of old papers - tax returns, bills, statements, etc.?

With Destinations free shred day coming up on October 27, I thought I'd share some information that I originally put together a couple of years ago to help people decide what to keep and what to get rid of.

We've been hearing about a paperless society for years now.  I don't know about you, but I still have tons of it in my filing cabinets!  I'm never quite sure when I can get rid of things...every time I get ready to rid my filing cabinets of the old stuff, I start wavering  What if I need it later???

To answer my own question, I've scoured the internet for information about how long I should keep my records.  Now, I'm going to share what I learned with you.

Death and Taxes
Inevitable, right? One of the biggest questions I ask myself is how long to keep my tax returns. According to Government Services Agency, you should keep them 3 to 6 years.  The IRS has the right to audit you within 3 years, but can can start legal proceedings for up to 6 years if they believe you have under-reported your income.  And, there's no time limit on fraudulent returns or if you haven't filed a return at all.  So, bottom line - if you're honest you shouldn't need them for more than 6 years.

On the other hand, you should never throw out a death certificate or any other vital records, such as birth certificates and social security cards.  These need to be kept in a safe place.  Safe deposit boxes or fireproof files/safes are good choices.

Paper or Plastic?
You should keep most canceled (or duplicate) checks at least a year.  Credit card receipts can be pitched as soon as you verify your statements.  There are some exceptions:  if you have canceled checks or credit card receipts/statements that relate to your taxes or larger purchases, you should keep them. For my part, I usually put the tax items in my tax file, so it will get shredded when my tax file goes.  For large purchases, I try and keep these as long as I own the item.  MIStupid.com recommends this in case you ever need to prove the value of the items.

Show Me the Money
Pay stubs and the statements from your bank or credit union can be kept for a relatively short time.  Keep pay stubs until you verify that they agree with your W-2 earnings at the end of the year.  Keep your bank/credit union statements for at least 3 months and discard them only after you have balanced the statement and checked that all transactions are correct.  Again, there is an exception to this rule - keep your statements on IRA accounts and records of your contributions until you retire or close the account.  Keep brokerage statements until you sell the securities.  If each statement shows what you own, toss the old one when you get the new one, perhaps keeping the year-end statements indefinitely.

Bills, Bills, Bills
I know at my house, this is where the bulk of the paperwork comes from.  I'm always hesitant to throw out any bill and must admit that my files are stuffed with BGE and Verizon bills (among others) going back at least a couple of years.

As of this writing, I'm turning over a new leaf.  The advice I read is that you should only keep the bill until you receive proof of payment.  That can be a canceled check or the next statement which shows the payment has been received.  After all, the company can always reproduce your bill or statement and you can easily obtain a copy of the check from your bank or credit union.  Here at Destinations, you can click on the check within online banking and print the image yourself!

Safety First!
As you clean out your files, make sure you dispose of personal and confidential information properly.  Invest in a small paper shredder and shred everything that you discard.  With identity theft on the rise, it's better to be safe than sorry! 

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Mike Pierce October 04, 2012 at 12:08 PM
Keep canceled checks? What bank do you use?
Carol Szaroleta October 04, 2012 at 12:50 PM
I use my Credit Union -- Destinations Credit Union in Parkville. I don't receive cancelled checks, but have duplicate checks for my records. I can also print the image of the cancelled check from my account in online banking. Checks related to taxes should be kept with your taxes until those are no longer needed. You should probably keep checks related to home purchase and home improvements indefinitely. I also hang onto ones for large purchases unless I have some other paperwork (like a warranty/service plan) to prove the purchase date. I go through them once a year and save the ones I need in my tax file or my other files then shred the rest. Once payments have appeared on statements, you have no need of the cancelled check.

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