How Long to Keep Important Paperwork

Is your important paperwork piling up? Check out the information to see what to keep, what to toss, and how to store those hard-to-replace documents.


Where to Store Documents

Emergency Kit

• Birth/death certificates
• Social Security cards
• Passports
• Emergency contact information (insurance agents, doctors, family)
• Marriage certificates/divorce decrees
• Wills
• Copies of your driver's license, green card, and other identification cards
• Copies of lifesaving prescriptions (like insulin, asthma inhalers, etc.)
• List of bank account and credit card account numbers
• Inventory of household goods

Filing Cabinet

• Legal documents
• Warranty/rebate documentation
• Bank statements
• Paycheck stubs
• Bills
• Investment records
• Retirement savings statements
• Medical records
• Credit card statements
• Tax returns

How Long to Keep Documents
Tax documents - Seven Years. This includes tax returns, as well as supporting documents like W-2 forms, receipts, and real estate closing statements. The IRS may audit you within three years if it suspects good-faith errors; six years if it believes you underreported your income by at least 25%; and unlimited time if you did not file a return or filed a fraudulent one.

Investment records - Keep as long as you own the securities, plus another seven years. You'll need them to prove capital gains and losses.

Bank statements - One month. You just need these long enough to check the accuracy of the transactions Unless the statement is your only record for a tax-related transaction, there's no need to keep them longer. Plus, your bank will have them available online.

Retirement plan statements - Most, one year, for tax purposes. Keep Roth IRA statements until you retire, to prove you already paid tax on your contributions.

IRA Contributions - Forever - If you made a nondeductible contribution to an IRA, keep the records indefinitely to prove that you already paid tax on this money when the time comes to withdraw.

Legal Correspondence - (Marriage Certificates, Death Certificates, Divorce Papers, etc.) - Forever

Credit card statements - Shred immediately after checking the accuracy of the transactions. These documents are a prime source for identity theft. Unless the statement is your only record for a tax-related transaction, there's no need to keep them longer. Plus, your issuer will have them available online.

Paychecks - One year, until you receive your W-2. Bills One year, for tax purposes. W-2 forms Until you begin claiming Social Security. They're the best estimate of your earnings and entitlements.

Paid Bills: 1 Year - Go through your bills once a year. In most cases, when the canceled check from a paid bill has been returned, you can get rid of the bill.

Insurance Records - Life of the policy, plus 10 years.

Warranties/Guaranties - Life of the Product

Current Contracts and Leases - Life of Contract, plus 3 Years

Audit Reports - Forever

Housing Records: As long as you own the home, plus 6 years.

• Keep all records documenting the purchase price and the cost of all permanent improvements -- such as remodeling, additions and installations.
• Keep all records of expenses incurred in selling and buying the property, such as legal fees and your real estate agent's commission, for six years after you sell your home.
• Holding on to these records is important because any improvements you make on your house, as well as expenses in selling it, are added to the original purchase price or cost basis. This adds up to a greater profit (also known as capital gains) when you sell your house. Therefore, you lower your capital gains tax.

Brokerage statements - Until you sell your securities.

*** WORD OF CAUTION***
Make sure you shred all personal documents before you throw them away. If you don't, thieves can go through your garbage, find account numbers and use this information to buy items on your credit card or empty your bank account.

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Newby Realty provides sales of new and used manufactured (mobile) homes throughout Florida in Bradenton, Clearwater, Debary, Edgewater, Ellenton, Englewood, Fort Pierce, Hudson, Lakeland, N. Fort Myers, New Smyrna Beach, Ocala, Orange City, Palmetto, Port Charlotte, Port Richey, Sarasota, Winter Springs, Zephyrhills.