HomePaper OrganizingTaxes Are Done – What Papers Do I Save?

Taxes Are Done – What Papers Do I Save?

What-Papers-Do-I-Save1-5Signing and sending off your tax returns can result in a huge sense of relief, but the paper trail that’s left behind can be almost as confusing as the actual tax forms! The fear of tossing out some document that you might need in the future, can result in unnecessary paper hoarding, and eat up tons of valuable storage space in our homes. Right after your 2013 returns are filed, is the perfect time to reduce your paper clutter and create a system to manage your financial files in the future.

Some people aren’t comfortable going entirely “paperless,” and there are some documents for which a hard copy should be kept, but chances are you’re holding onto a ton of paper that you no longer need. Get yourself a good quality shredder (skip the ribbon-cutting models and go for the confetti or cross-cut shredders for extra security), and use the following guidelines to lighten your paper burden and save a few trees in the process.

The IRS does not require paper copies of your receipts, so you can scan them to your computer and toss the originals. We personally use ShoeBoxed to scan our receipts each month and then we shred the receipt. They’re saved as a PDF on their website and can even be categorized if necessary. Here’s a link for a 30-day free trial. They can scan bank statements, too. Better yet, download statements from your bank or credit card company to save tons of time.

  • You are subject to random audits by the IRS for up to three years after you’ve filed a tax return, so supporting documents should be kept through that period. If a substantial error is found they can go back six years, so if like to cheat on your taxes or if you are unsure, save six years of supporting documentation. Some tax experts recommend holding on to the actual returns indefinitely, just in case your heirs require the information. You can choose to keep the hard copies, or scan it all to your computer. Mine are all scanned.

Everyone has an opinion of what papers you should keep (in paper or electronic format) and what documents you can get rid of sooner. Do you agree with the following recommended guidelines from financial guru Suze Orman?

Keep for one year

  • Pay stubs (can be shredded once you’ve received your W2 and yearly social security statement)
  • Utility Bills*
  • Cancelled checks*
  • Credit Card Receipts* 
  • Bank Statements* 
  • Quarterly Investment Statements (can be shredded once you receive your annual statement)

Keep for 3 – 6 years

  • Income Tax Returns
  • Medical Bills and Cancelled Insurance Policies
  • Records of Selling a House
  • Records of Selling a Stock
  • Receipts, Cancelled Checks and other Documents that Support Income or a Deduction on your Tax Return
  • Annual Investment Statement (keep for three years after investment is sold)

Keep for 7 years

  • Records of Satisfied Loans

Keep while active

  • Contracts
  • Insurance Documents
  • Stock Certificates
  • Property Records
  • Stock Records
  • Pension and Retirement Plan Records
  • Property Tax Records Disputed Bills (keep until the dispute is resolved)
  • Home Improvement Records (Keep for at least three years after the due date for the tax return that includes the income or loss on the asset when it’s sold)

Keep forever

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

For more information, you can visit Ms. Orman’s website.

* If you are self-employed and/or work from home, you should keep these items for three – six years. You can find information about proper record-keeping practices from the IRS.

Once you’ve scanned and shredded everything else, make sure you back up your newly digitized financial files on either an external hard drive or our preferred method, cloud-based storage option. We use Carbonite on all our computers. Hard drives are hard drives and they will eventually fail. Most people find that tackling paper piles isn’t nearly as difficult as they thought it would be, so schedule a few hours to get your files under control and you can face next tax season without fear! What do you plan to do to manage your financial clutter now and in the future? Please share your tips in the comments below.

Recommendations – Carbonite & ShoeBoxed.


Written by

Certified Professional Organizer®, Scott Roewer is founder of The Organizing Agency, a professional organization and productivity company devoted to teaching residential and business clients how to increase productivity, save money, and how to live a more organized and abundant life.

An award winning company, in 2013, The Organizing Agency was once again awarded the Angie’s List Super Service award, in 2012 the National Association of Professional Organizers recognized Scott with its top honor, the Founders’ Award, and later the same year, the U.S. Air Force commended his volunteerism, naming him Joint Base Andrews “Hometown Hero.” For more information on Scott’s team and how they can help you, contact the office online or call us directly at 202-249-8330.



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