How Long Do I Have to Keep my Paperwork? 

Michelle Singletary, the Washington Post columnist who writes “The Color of Money” column, asked some professionals for advice on what documents should be retained.  Here is some advice that she gave on how long to keep all of that paper!!

Tax Records:  Keep tax records up to seven years after the return is filed.  If you fail to file in a given year or have gotten in any trouble with the IRS by filing something fraudulent, keep your records indefinitely.  But keep your tax RETURNS indefinitely as they are a great record of your family’s economic history and can help to answer a variety of questions over the years if you ever need to do some research.

Keep business, real estate and investment purchase records for seven years after you’ve sold the asset and included the asset in a tax return.

Receipts:  for big ticket items such as TV or computer purchases, hold onto the receipt as long as you own the item.  This is for insurance and warranty purposes.

Credit card statements:  since credit card companies usually give you a year end statement, you can usually shred these at the end of the year.

Home improvement documents:  Hold onto them until you sell the home.  This is because you can use the cost of improvements to reduce the amount of gain when you sell the house.

Medical bills:  save these for three years if you are using a Health Savings Account or Flex spending account. Consider it to be a tax document.

Investment and real estate records:  many of these are available online. So it is not necessary to keep the paper as well.  But you do want to make sure that you have access to these documents as they establish your cost basis when you sell the asset.  We would suggest keeping a few months of statements, and certainly keep the end of year summary for 7 years as tax support.

“Forever Documents” – those documents that you keep forever:

  • Birth certificates, death certificates and adoption papers
  • Marriage license and divorce documents
  • Wills
  • Military Records
  • End-of-year pay stubs.
  • Mortgage, student and car loan payoff statements.

There are many sites on the internet with information about what to keep.  Here are a couple good ones:

By | 2017-07-04T21:51:38+00:00 February 7th, 2017|Legal Information, Probate & Trust Administration|0 Comments