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Lose It Or File It: An Easy System To Keep You Organized During Tax Season

Tax time is upon us — so now is a great time to whip your records into shape! Here is a breakdown of what you really do need to keep – and what you can safely toss.

KEEP IT!

  • Tax records. This includes not just your returns, but all documentation used to file your return (W-2s, 1099s, receipts or cancelled checks for things like charitable contributions, alimony, etc.). How long:  Seven years.  Generally the IRS can go back three years for an audit, but can go back up to six if a “substantial” (25% or more) error is identified.
  • Year-end retirement plan statements.  As noted below, you’ll be discarding your quarterlies and will be keeping only annuals.  How long: Until you retire or close the account.
  • Year-end loan statements. As noted below, you’ll be discarding your monthlies and will be keeping only annuals.  How long: Until the loan is paid off; however, always keep the final notice documenting that your loan has been paid off.
  • House-related records. Keep documentation related to the purchase of your home, permanent improvements (remodeling, additions, etc.), and the sale of your home.  How long: Until you sell the home, plus seven years.
  • Brokerage account (non-retirement) statements.  Retain documentation of securities purchased outside of a retirement account for capital gains purposes later.  How long:  Until you sell the securities, plus seven years.
  • Receipts for large purchases.  Keep your receipts and/or appraisals on big-ticket items such as jewelry, artwork, appliances, etc. for insurance purposes.  How long: As long as you own the item.

For tips on what you should toss, check out the rest of the article over at Hope For Women Magazine!

  • Bill Boyd

    awesome advice! 

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