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Record Retention - Some Basic Guidelines


Overwhelmed by paper and running out of storage space?  A common question is, “How long must one keep all this stuff?"   Unfortunately, the answer is "It depends."  We thought it might be helpful to give you some basic guidelines.

According to federal and state tax laws, the length of time you should keep a document depends on the action, expense, or event that the document records. Generally, you must keep the records that support an item of income or deductions on a tax return until the period of limitations for that return runs out.

The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax. The information below contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.

Keep Forever

Birth Certificates                         Adoption Papers

Custody Agreements                   Marriage Certificates

Passports Property Deeds            Divorce Papers

Death Certificates                       Record of governmental employment

Retirement and pension records                                                       

Tax forms and supporting records relating to non-deductible IRA contributions

                             

 

Keep Three Years

Keep Seven Years

 Medical Bills

 

 Utility Records

 

 Expired Insurance Policies

Tax returns

Supporting documents for returns/deductions:W-2s, 1099s, receipts

Receipts for home improvements that can be added to tax basis of home 7 years after a home is sold if it is not a “rollover” transaction

All of the following IF tax related:

Bank statements, cancelled checks, medical bills, property records, sales receipts, utility records, invoices.

 

 

 

 

 

 

 

 

 

 

 

 

 

What about all of those other stacks of papers that are piling up, but are not tax related?  This should help:

Paperwork

How long to keep?

 

 

Credit Card Receipts

Until verified on statement

Car records

Until the car is sold

Insurance Policies

The life of the policy

Mortgages / Deeds / Leases

Seven years beyond agreement

Pay stubs

Until reconciled with your W-2

Contracts

Seven years beyond agreement

Brokers’ confirmation for purchase

Until security is sold

Property record / Improvement receipts

Until property is sold

Sales receipts

For the life of the warranty

Warranties, extended service agreements

For the life of the product or expiration of warranty

Household operating bills

Until payment is verified on the next bill

 

Click here for a word copy of this article.