Monday, 26 April 2010 11:46
by
Jacki
If you’re like many people, there’s a closet or shelf in your home with stacks of shoeboxes full of cancelled checks, receipts, and other crumpled pieces of paper. You really don’t know whether you need to keep them, but you figure that you should just to be on the safe side.
Here’s the good news: you can probably get rid of most of them, because most of them really won’t do you any good. For example, if your credit-card receipts are not for items on which you’re taking tax deductions or have warranties, you can generally discard them once you’ve received your monthly statement. The same holds true for deposit slips, ATM receipts, and similar items. If you’ve paid taxes on IRA contributions, save that information so you’ll remember not to pay taxes when you withdraw them.
When it comes to tax-related items, you’ll want to be a little more choosy, but you don’t need to hold on to everything forever. The IRS has a limited amount of time in which to audit your return and question the information you’ve included. As a general rule, you’ll want to keep all documents that provide proof of deductions for three years after you’ve filed the returns. If they are documentation for a business tax return, save them for six years.
There are two exceptions to consider. First, it’s a good idea to save copies of the returns themselves even after you’ve discarded the receipts and other backup. They don’t take up much space, and you may need information from them later. Second, be aware that if the IRS thinks you’ve underreported your income, they can request information from as far back as six years – and if they think you’ve broken the law, there’s no time limit.
Keep most of the paperwork associated with your home, such as the deed, the title, and the mortgage documents. Also save receipts for appliances and other items with long-term warranties.
Don’t dispose important records without shredding or otherwise destroying them. Identity thieves often look for carelessly discarded information that allows them to victimize others.
Helpful Links
IRS Publication 552: Record Keeping
FORUM Credit Union Shred Days