Purging is an often recommended and common sense first step to organizing. When we’re dealing with documents, most of us aren’t always sure what to toss, what to keep and for how long. Here are some guidelines to get you started on handling common types of documents. Your situation may be more complex, if, for instance, you have chronic health problems, or have a business. When in doubt, ask an accountant, attorney, daily money manager, or other trusted professional. When it comes to those documents that you should keep, consider that most of the documents can be scanned and the hard copies discarded.
TOSS
- Bank withdrawal and deposit slips, ATM slips
- Expired warranties and instruction for items you no longer own
- Statements for closed accounts
KEEP SHORT TERM
- Receipts for minor purchases, keep until you’ve used the items
- Credit card receipts, discard after you’ve verified against the credit card statement
- Pay stubs, keep until you receive annual Form W-2
- Utility and cable bills, either toss once next one arrives or keep up to a year (longer if needed for tax purposes)
- Credit Card statements, discard after one year unless needed for tax purposes
- Quarterly brokerage, IRA, mutual fund statements, keep until you receive the annual statement
- Bank statements, keep 1 year
- Car registration and insurance, keep until updated
- Medical Explanations of Benefits, keep 1 year, but if you qualify for medical tax deductions, 7 years.
KEEP LONG TERM
- Deed, keep as long as you own the house
- Records showing what you spent on home improvements until you sell the house (proves value to potential buyers and could offset expenses of home value has increased significantly)
- Car title or lease, keep as long as you own or lease the vehicle
- Receipts for major purchases keep until the warranty expires
- Receipts for big-ticket purchases, keep as long as you have the item, in case you need to make an insurance claim
- Insurance policies, keep as long as effective
- Documents for tax purposes, such as receipts you’ll itemize, (IRS recommends keeping 7 years after filing, in case you need to file an amended return or if questions arise)
- Records showing how much was contributed to and withdrawn from IRAs and 401(k)s
- Documentation of the cost basis for investments, whether purchased, inherited, or received as a gift, as long as held, then retained for 7 years after included in tax filing
KEEP PERMANENTLY
- Marriage licenses
- Divorce papers
- Military records
- Birth certificates
- Wills, Power of Attorney, etc.
- Death certificates
- Proof of repayment of student loans, mortgages and other debts
- Copies of all tax returns with W-2s, which could be useful to correct erroneous Social Security earnings mistakes
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