While organizing papers with our clients, we are constantly asked, “Do I need to keep this?” when we come across bills, receipts, financial and medical documents.
Here are some definitive answers you can apply now to get your files into shape, and then moving forward for the rest of your life.
Toss Every Month:
-ATM & Bank Deposit Slips AFTER you’ve checked your on-line statement.
-Credit Card Receipts AFTER you’ve checked your monthly statement.
-Sales Receipts for minor purchases AFTER you make sure you have no intention of returning the item or if it has no warranty.
Toss After One Year:
-Monthly Bank and Credit Card Statements (if you don’t itemize deductions.) You can also get all this information ONLINE.
-Monthly or Quarterly Brokerage and Mutual Fund Statements (as long as your year-end
statement clearly shows the total amount you’ve paid in interest and property taxes over the course of a year.)
-Phone and Utility Bills (as long as you don’t claim a home office on your taxes.)
-Paycheck stubs (your year-end W-2 serves as proof of income for the year)
Toss After 3-5 years:
-Explanation Of Benefits Hang on to EOB forms at least until you are sure that a particular medical bill has been paid in full from all sources (e.g., a combination of Medicare and supplemental insurance or primary and secondary health insurance policies). This may require confirmation from the original medical provider with a statement showing a zero balance. After your bill is paid in full, you might want to keep EOBs in an inactive storage file for up to three to five years longer "just in case." It is not uncommon for some medical providers to send bills long after a medical service has been provided. Having EOBs on file can help document the status of previous medical claims.
Toss After 7 years:
-W-2 & 1099 Forms
-Year-End Statements from Credit Card Companies
-Canceled Checks & Receipts/Statements For:
Annual Mortgage Interest and Property Taxes
Deductible Business Expenses
Child Care Bills
Out of Pocket Medical Costs
Any other Tax-Deductible Expense
-*Annual Tax Returns* (you can toss after 7yrs but never to just be safe OR ask the preference of your accountant)
-Year End Summaries (from any financial institution)
-Confirmation Slips that list the purchase price of any investments you own
-Receipts for Major Purchases
We hope this clears things up. Print out this list and put it in the front of your file drawer so there is never any doubt!