How Long to Keep Bills etc.
 

How long should one keep bills etc. I am doing some house cleaning and noticed I have years worth of cc statements, bank statements, investment statements, healthcare, receipt, blah blah blah. I feel like i'm drowing in paper :)

Anyone know?

Thanks,
--marc

I know that five years is more or less the limit on income-tax related stuff, so my accountant informs me. If they haven't gotten to you by then, it's too late. So I consider five years to be the limit.

I make an exception for investments. If you buy securities, for example, you need to be able to prove what price you bought them at, to figure out what the eventual profit or loss is when you sell it, for tax purposes. So I would hang onto such stuff for as long as you hold the stock (and, I suppose, for five years after you declare the profit or loss.)

My personal philosophy (as a reformed /reforming packrat) is that bank statements can be re-issued in most circumstances. If you're saving utility bills (phone, internet, cable, power, water, etc) and you're not using them to make claims -- say, if you run a home office or something and are using them as deductions against your income, they dont need to be saved.

Just figure that anything that can be reprinted, and anything that isn't going to be seen by an auditor, can be chucked.

This is your non-legal, non-accountant viewpoint. Take it for what it's worth, and nothing more!

Seven years is what most people keep for income taxes.

Seven years.

I try to save most things with the exception of utility bills, etc, for seven years. A years worth of paperwork is really not that bulky if organized (I do it at tax time), and stored in a dry place. Those low plastic containers that fit under the bed are great, and will literally hold years of papers.

I save nothing, but then again all my bills are very standard and can't really be written off against anything anyway, so there's no point.

You only need to hold personal records for the IRS 3 years. Even if you itemize, that can't be much. Businesses need to hold on for 7. Longer, but more space.
If you don't itemize, space is even less.

It's hard to generalize. I've heard that you should keep the actual tax return (the 1040) as long as possible. Supporting documents, you can/should pitch after 7 years or so.

For tax purposes, remember that you need to keep records from the triggering event. So if you buy a stock, you should hold onto records of the purchase (and your cost basis) until the time you sell the stock, plus whatever your record retention period is. If you're keeping track of cost basis for your home, you need to keep those records/receipts until you sell the home, etc.