Not all personal documents need to stay in your possession permanently. Before you start shredding your old tax returns and pay stubs, it helps to know whether or not you may need them again.
Keep These Documents Permanently
There are documents you need to hold onto indefinitely. If you were under the impression you could toss your tax return paperwork after seven years, you’re mistaken. Hold onto tax returns permanently; You’ll need them if you ever get audited. Of course, you can keep your tax returns stored digitally.
Financial records for inheritances, legal filings, and even those for major purchases should also be held onto permanently, or until you no longer own the major purchase (like records for the purchase of a home that you sold two years ago).
Keep These Documents for Three to Seven Years
There are tax-time documents that you can throw away after seven years. Your 1099s, W-2s, donation slips, and other supporting tax documents only need to be held onto for seven years maximum. They will come in handy if the IRS has any questions within a few years of that tax year.
Keep These Documents for a Year
Keep documents like lease agreements for a year after you’ve moved out. If you don’t get your deposit back or moved out due to eviction, your records could come in handy in court.
Hold onto pay stubs, bank statements, and your credit card statements for a year, or until after you file your taxes for that year. Your pay stubs and bank statements will come in handy to use in double-checking that your W-2s and 1099s are accurate.
Toss These Documents the Following Month
For most folks, your utility bills can be tossed after you pay them. If you work for yourself, hold onto them until you do your taxes for that year. Of course, if you’ve signed up for paperless bills, you won’t have to worry!
Deposit and withdrawal slips can also be tossed monthly. Use them to verify your monthly bank statement is correct, then shred them.
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