Last week we suggested a great system to use for filing your bills, our Bill Organizer. This naturally leads to the question of how long do you have to keep these records.  Well according to the IRS you better clear out another section of the garage because most records need to be kept for at least three (3) years.

We consulted with an accountancy firm in Los Angeles, and they recommended the following guidelines on what to keep and for how long.

Once you've reviewed these guidelines, file your yearly Bill Organizers into a bankers box and label with the current year and store in the garage.  Then at the beginning of each new year, simply file your most recent records and dump those files whose archival time has lapsed.

While there is some distinction between 3 and 7 years, I personally save both categories for the 7-year period.  That way, when it's time is due, I just dump the whole box without having to figure out what stays and what goes.

When it is finally time to throw out your old documents, make sure to SHRED anything with sensitive information (i.e. social security numbers, account numbers, medical etc).  It is also a good idea to apply this practice to your daily mail.


Used together, our Bill Organizers and archival recommendations insure that  you're ready for the tax man should he decide on a surprise visit.



Keep for Three (3) Years
Insurance records (expired)
Billing statements (except where noted below)
Wage and Salary stubs
Charitable Donations records

Keep for Seven (7) Years
Disability records
Unemployment income stubs
Payroll check stubs
Bank Statements
Cancelled checks (except shown below)
Backup paperwork for Tax Returns
IRS audits
Credit Card Statements
Medical bills/claims

Keep FOREVER
Tax Returns
Deeds, Mortgages and bills of sale
Legal documents
Claims and Litigation documents after settlement
Accident reports/claims (including medical records)
Capital Stock and Bond records (showing purchase, sale and transfer)
Dividend check stubs
Cancelled checks (for taxes, property purchases and other special contracts -- file with papers pertinent to purchase)
Insurance records current
Property appraisals
Automobile purchase information (current)
Lease information
Medical records
Education records (for self and kids)
Pension Plan records
Retirement Plan records


CATEGORIES FOR BANKERS BOXES

Year Boxes for Bills - 7 years
Tax Returns - Forever
Property Purchases - Forever
Property Sales - Forever


STOCK RECORDS

Keep individual stock purchase and sale records for three years after stock sale.  Store with your tax information.




STUFF YOU MAY NEED


Fellowes(R) FS-5+ Strip-Cut Shredder


 
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