How Long to Keep Financial Records?

If paper de-cluttering was one of your New Year’s goals, you may be wondering which financial documents you can safely shred.  While some documents need only be kept a few months, others should be kept for several years, or in some cases indefinitely.  financial records

It’s a good idea to keep these documents for 7 years:

  • W-2 and 1099 income forms
  • Year-end bank and brokerage statements
  • Receipts or cancelled checks for deducted expenses
  • Home purchases or closing statements, insurance records and receipts for improvements
  • Records of selling of a home – keep for 6 years after the sale

You shouldn’t need to keep these documents longer than a few months:

  • Cancelled checks or their e-copies
  • Debit & Credit card receipts once you’ve reconciled with statements, unless reported as an itemized deduction
  • Monthly loan statements once you’ve received your year-end summary

You should keep these indefinitely:

  • Records or IRA Contributions (particularly nondeductible contributions)
  • Annual summaries of retirement/savings plan statements
  • Copies of tax returns
  • Receipts for big purchases – jewelry, appliances, antiques, cars, collectibles, furniture, computers – as proof of their value in the event of loss

To reduce paper clutter, you can scan your records and save them as PDF files.  Be sure to back them up!  And, before tossing any document that contains a social security number or bank account number, shred it to deter theft! 

You Are Already Earning Points … Sign Up To See How Many You Have!

LFSL Online Banking

Follow Us