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| Dear Yahoo!: |
| How long should you keep personal financial records like bank statements, receipts, tax statements, etc.? |
Steve
Cleveland, Ohio |
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| Dear Steve: |
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This answer is for anyone who has ever had an overstuffed filing cabinet, a desk stacked with bills, or a "special" drawer in which you can find phone bills from 1988. We searched on a few of the key terms in the question -- "receipts, how, long, keep" -- and quickly found a couple of web sites that offered sound advice for getting rid of the mess. Our first stop was a web page from Bankrate.com with the perfect title: "What financial records to keep and how long to keep them." The information is laid out in an easy-to-read table format. Here's a quick overview -- for details, check out the web page. - Taxes -- Seven years. The IRS has three years from your filing date to audit your return if it suspects
good faith errors, and six years if it thinks you underreported your gross income by 25 percent or more.
- IRA contributions -- Permanently.
- Retirement/Savings plan statements -- From one year to permanently. Keep the quarterly statements until you receive your annual summary; keep the annual summaries until you retire or close the account.
- Bank records -- From one year to permanently. Throw away checks that have no long-term importance, but keep checks related to your taxes, business expenses, and housing and mortgage payments.
- Brokerage statements -- Until you sell your securities.
- Bills -- From one year to permanently. In most cases, when you receive the canceled check, the bill can be tossed. However, you should keep bills for big
purchases (e.g., jewelry, appliances, cars, collectibles, etc.) for proof of their value in the event of loss or damage.
- Credit card receipts and statements -- From 45 days to seven years. Keep the statements seven years if they document tax-related expenses.
- Paycheck stubs -- One year. If your W-2 form matches your stubs, you can toss your stubs.
- House/Condominium records and receipts -- From six years to permanently.
We found a couple of other helpful articles in the search results -- one from Kiplinger.com and another from BlueSuitMom.com. Kiplinger.com suggests you keep your tax returns forever,
while the blue-clad mother says it's a good idea to routinely purge and file your receipts on a monthly or quarterly basis. All the sites offer the same piece of advice -- whether you use a filing cabinet, shoebox, or desk drawer, find a system that works for you and stick with it.
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