How Long To Keep Financial Documents

September 24, 2007 · Filed Under · 2 Comments 

Stuffed Filing CabinetMy wife and I are always having a “friendly” discussion about how long we need to keep financial records. You know credit card statements, tax returns, bank statements, medical billing documents, propane bill, electric bill, and so forth. This conversation typically happens when our office filing cabinets start to resemble the garage of the crazy cat lady down the street. So I did some research and found some great rules of thumb from both Bankrate.com and straight from the horses mouth at IRS.gov.

Tax Stuff

  • 7 Years. Keep tax returns, cancelled checks and receipts for seven years.
  • IRS has 3 years from when you filed to audit you if they suspect you “goofed” but it was in good faith.
  • This number goes up to 6 years if they suspect you underreported your income by $25k or more.

General Bills

  • 1 Year.
  • Bankrate suggests going through your bills once a year and if the cancelled check for that bill has come through introduce Mr. Bill to Mr. Shredder.
  • Another good tip is to keep bills/receipts for big ticket items in an insurance file in the event of fire or hurricane.

Bank Statements

  • 1 Year seems to be the concensus.
  • Remember to go through your cancelled checks and save any that have tax implications. Things like business expenses, mortgage payments, home repair, etc.

Credit Card Statements/Receipts

  • 45 Days if it is non-tax related. Essentially, keep receipts until you can match them up with your monthly statement. Then introduce them to Mr. Shredder.
  • 7 Years if it is a tax related expenses. Ouch!

Paycheck & Job Related

  • 1 Year.  Keep your pay stubs for one year and once your W-2 arrives, make sure they match, if they do, shred those pay stubs. I also use my financial statements when I start a fire in the fireplace all winter. Good way to get rid of unwanted documents.
  • If your W-2 does not match your pay stubs, ask for an amended one called a W-2c.

IRA and Retirement Stuff

  • Keep your quarterly statements until you receive your annual statement and shred your quarterly stuff if it aligns with your annual statement.
  • Keep your annual statements until you retire or cancel the account.

Medical Insurance Stuff

  • 3 Years. Keep your medical bills and medical insurance statements for 3 years in case of insurance disputes.

I hope these tips help to de-clutter your life a little bit. I know they have mine!

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Comments

2 Responses to “How Long To Keep Financial Documents”

  1. Lynnae @ Being Frugal on September 24th, 2007 6:21 am

    Thanks for the info! I always wonder how long I should keep stuff. I think I tend to shred things a little too soon. :)

  2. Kyle on September 24th, 2007 10:13 am

    Lynnae – I use to do the same thing, but now we hold on to stuff a little bit longer just in case.

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