Keep or Toss: Getting Your Finances Organized in 2018

Keep or Toss: Getting Your Finances Organized in 2018

Jan 22, 2018

As you scramble to go through receipts, bills, and pay stubs from the year for tax time, you might be asking yourself: What do I really need? How long must I keep those items? What is clutter and what is worth keeping? Here's a helpful guide:

What to keep for 1 year

  • Paycheck Stubs: you can dispose of once you have compared to your W2 and annual social security statement.
  • Utility Bills: you can throw out after one year, unless you’re using these as a deduction for a home office – then you need to keep them for three years after you’ve filed that tax return.
  • Cancelled Checks: unless needed for tax purposes – then you need to keep for three years.
  • Credit Card Receipts: unless needed for tax purposes – then you need to keep for three years.
  • Bank Statements: unless needed for tax purposes – then you need to keep for three years.
  • Quarterly Investment Statements: hold on to until you get your annual statement.

What to keep for THREE years

  • Income Tax Returns: please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. If you omit 25% of your gross income that goes up to six years, and if you don’t file a tax return at all, there is no statute of limitations.
  • Medical Bills and Cancelled Insurance Policies
  • Records of Selling a House: documentation for Capital Gains Tax.
  • Records of Selling a Stock: documentation for Capital Gains Tax.
  • Receipts, Cancelled Checks, and other Documents that Support Income or a Deduction on your Tax Return: keep three years from the date the return was filed or two years from the date the tax was paid — whichever is later.
  • Annual Investment Statement: hold onto three years after you sell your investment.

Keep Forever

  • Marriage Licenses
  • Birth Certificates
  • Wills
  • Adoption Papers
  • Death Certificates
  • Records of Paid Mortgages
  • Life Insurance Policies


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