Which Tax Records You Should Keep

Now is a good time to clean out your folders and files of unneeded paperwork, while still making sure you’re holding on to the tax records that you need to. Real Simple has a great chart that will tell you exactly what to keep and what to toss, split into whether you should toss an item every month, after one year, seven years, or keep forever. In addition, this Kiplinger article goes into the reasons why it’s important to keep some records for the specified period of time. The exercise will also help you get your papers in order for the upcoming tax season, which, as we’ve started seeing ads for tax prep software, is now upon us.

Deciding Which Financial Records to Keep [Real Simple]
(Photo: megan_soh)

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  1. Lawk Salih says:

    I keep it all… you never know when uncle Sam comes after you!

  2. mac-phisto says:

    @lawksalih: ugh. you remind me of my grandfather who was an auditor for an international union. it took us over a year to clean out tax records, receipts, bank statements, check registers, etc. dating back prior to 1940. he kept everything…even had black books where he recorded every cash transaction down to the penny. imagine an attic filled with filing cabinets…i think he had ~20.

    today i think they call that OCD. back then, it was referred to as “thorough”.

  3. weathernut says:

    With my luck, I always find I need a document the day after I toss it out. Now, I scan everything, file the originals for important documents and shred everything else. Now, if I need any document, all I need to do is print it out. Oh, and don’t forget to keep backups!!

  4. catcherintheeye says:

    @mac-phisto: I have to agree with lawksalih – granted, I only keep 7 years, but absolutely anything and everything that can be used against/for me when it comes to taxes, I keep.

    I’ve had too many family members get burned.

  5. jaredharley says:

    @weathernut: I’m the same way – I use my scanner to scan all of the important documents I can’t get online. In fact, when we bought our house, I brought all of our documents (and you homeowners know how many there are!) to work and used our auto-feed network scanner to create PDFs. Rather than a filing cabinet with folders for “2005″ “2006″, etc, I have CDs.

  6. enine says:

    Check register and cancelled checks? What century was this written in?

    I’m a keep everything type myself. Any receipt for any purchase gets scanned and put in the firepeoof safe unless its dining out, those toss once its gone past pending in the web banking.
    All purchases are inventoried and organized depending on where the item is kept or if its personal or my wife or I. This sounds like a lot of work but isn’t really, how often do you buy chothes or such, if you really care about your finances then not all that often, probably just when you need to or a shopping spree once and a while. It helps to keep organized and not have too much clutter.
    I keep all my bank records, I’ve had on occasion where I ran my credit report only to find a late notice appeared two years after I close the account and having those records prooved to the credit card company that I wasn’t late before closing my account and they certainly shouldn’t be marking my credit after I closed it.
    I also keep the back statements. I’ve been keeping a register which is simply downloading from the bank’s web site and them putting in comments but I’d like to get rid of that and find a tool that will let me edit the pdf statements from the bank and add notes to them.

  7. teh says:

    @weathernut: I do the same. The imperative statement here is to keep backups — preferably offsite backups.

  8. enine says:

    @jaredharley: “with folders fort 2005, 2006″
    I learned to not file by year or month. Too many times I needed the statement where we bought x item and don’t remember when so I ended up havign to look in the folders for three or 4 years to find the right one. I’ve went to a / structure and sort the files by date.

  9. Curiosity says:

    @catcherintheeye:

    This is actually a good idea though too organized for some people. However keep in mind usually the tendency to be audited depends not only on your particular profession but the amount of money you generally make, and the “uniqueness” of your deductions.

    Similarly, realize that not only does the IRS keep your filings, but also your filings can be used for a number of things – they are resource and reference for business dealings and legal matters alike, as well as may help a person gain a greater insight into their finances.

    Moreover keep in mind that you can actually call the IRS (though I would do it anonymously from a friends cell etc.)

    Toll-Free, 1-800-829-1040
    Hours of Operation: Monday – Friday, 7:00 a.m. – 10:00 p.m. your local time (Alaska & Hawaii follow Pacific Time).

  10. scoosdad says:

    @jaredharley: Recordable CDs aren’t forever… make sure you copy them occasionally just to be safe.

  11. heavylee-again says:

    *Tax* records and documents? 7 years. Paid bills, bank statements, etc, get shredded after 1 year.

  12. AndyFromTucson says:

    I hate having old paper files pile up, and I also hate going through old paper records and sorting out what can be thrown away and what should be kept. So these days I keep PDF scans of everything on a backed-up hard drive and throw away or shred all originals as soon as I get them. With the price of electronic storage continuing to drop I can easily keep everything forever with little labor or storage cost, and when I die my survivors can keep (or nuke) one external hard drive instead of having to sift through reams of dusty old papers to clear out my home.

  13. rlee says:

    And then, when you’ve pitched your credit card data after 7 years, along comes the class action suit. How much did you charge in foreign currency, in 1997? Oops.