February 3, 2014

Have you ever found yourself pondering over a pile of papers that could contain personal tax documents such as pay stubs, bank statements, brokerage statements or utility bills?  Perhaps you are well organized.  CNN Money (2013) suggests the following:

Experts say that you should keep these documents for ONE YEAR:

1)    Paycheck Stubs  – until you get your W-2 in January to check for accuracy

2)    Bank Statements – to confirm your 1099’s

3)    Brokerage Statements – until you get your annual summary (keep longer for tax purposes if they show a gain or loss)

4)    Receipts for health care bills – just in case you qualify for a medical deduction

5)    Utility Bills – to track usage (seven years if you deduct a home office)


Items you should keep for SEVEN YEARS:

1)    Supporting documents for your taxes – such as W-2’s, 1099’s and receipts or canceled checks that substantiate deductions.  The IRS usually has up to three years after you file to audit you but may look back up to six years if it suspects you substantially under-reported income or committed fraud.  Note: Keep documentation for your 2013 return until 2020.


Items to be kept INDEFINITELY:

1)     Tax returns with proof of filing and payment

2)     IRS forms that you filed when making non-deductible contributions to a traditional IRA or a Roth conversion

3)     Receipts for capital improvements that you have made to your home until seven years after you sell the house

4)     Retirement and brokerage account annual statements

5)     Receipts for big-ticket purchases for as long as you own the item, to support warranty and insurance claims



1)     ATM receipts once recorded

2)     Bank deposit slips once the funds show up in your account

3)     Credit card receipts after you get your statement, unless you might return the item or need proof of purchase for a warranty

4)     Credit card statements that do not have a tax-related expense on them

Wait!  Before you toss these documents in the trash consider shredding them.  Identity thieves do dumpster dive.  Consult your tax accountant or attorney for advice before you rid yourself of the clutter.  What are your thoughts?  Are you hesitant about getting rid of the clutter of papers?  Or do you toss everything immediately?

Contact me personally by e-mailing me at christineroebuck@livemylifedebtfree.com.