In the start of the new year, we begin to look towards that big date looming over most of us-April 15th. With piles of papers, bills, pay stubs, receipts, etc., we get ready to bring it all to our accountants to sift through in hopes to squeeze out one more deduction. Then, all that paper comes back to us and what do we do? We stuff it in a filing cabinet for years, but just how long do we need to keep them?

Pay Stubs

Keep these until you can reconcile them with year-end statements unless they show cumulative activity for the year. However, if you are applying for a loan, you may need a few months’ worth of stubs.

Cancelled Checks

Most banks do not return cancelled checks to you but instead may send a photocopied sheet of your checks or store them digitally in your account. Be mindful, that while they may only be stored on your account for a year and will cost you to have the bank research them. Any copies of checks that were used for a deductible expense should be stored with that yea’s tax return.

Monthly Bills

Monthly bills, unless used for deductions, can be discarded

Income Tax Returns

Typically, the IRS requests you keep records for 3 years unless a) you don’t report income that you should report and it is more than 25% of the gross income shown on your return (keep for 6 years) b) if you do not file a return (keep indefinitely) or c) you file a fraudulent return (keep indefinitely). Keep employment tax records for at least 4 years. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction. – IRS.gov

However, depending on your state, your State Income Tax Returns may need to be held onto longer.

Property Paperwork

When it comes to property you own, you should keep all the paperwork associated with it up to a year after you sell your property.

In this day and age, you can keep copies of all of your documents for as long as you want by having them digitally scanned. In addition, we can securely store your physical documents, scan and store them for you and in the end, completely destroy all obsolete personal data. 

Additional Resources Tax Files:

Which Ones to Throw Out, Which Ones to Keep
http://www.kiplinger.com/article/taxes/T055-C001-S003-spring-cleaning-for-your-tax-files.html?rid=EML

What Records Can You Really Throw Away?

https://www.fool.com/personal-finance/saving/2009/01/16/what-records-can-you-really-throw-away.aspx