By Jackson Keenan, CFP®
Spring (and pollen) is in the air, and many of us will start our spring cleaning. The “urge to purge” might be strongest with our financial documents – taxes, statements, paid medical bills, etc. – but the nagging feeling of “should I keep this?” remains. This anxiety is typically attached to the fear of an IRS audit. To help provide clarity for what to keep and how long, you first need to understand the statute of limitations for tax returns.
How long do you have to revisit
prior tax returns?
Depending on the issue, three to seven years. I recommend erring on the side of caution and keeping your tax-related documents for seven years. Remember, there is no time limit for the IRS to show up if you filed a fraudulent return or no return at all.
Here’s a quick summary of suggestions for how long to keep other financial documents.
Keep in mind, your particular circumstances could recommend that you keep documents for longer than the suggested time periods below.
One Year
(Unless you need them for tax purposes, then keep for seven years)
- Paycheck stubs
- Utility bills
- Cancelled checks
- Credit card receipts
- Bank statements
- Receipts for large purchases
Three Years
- Cancelled insurance policies
- Annual investment statements
- Records of selling a house or stock
Seven Years
- Records of satisfied loans
Hold Until the Agreement or Underlying Asset
is No Longer Active
- Contracts
- Insurance documents
- Stock certificates
- Property records
- Investment records
- Pensions
- Retirement plans
- Home improvement records
- Records of disputed bills (Keep the bill until the dispute is resolved.)
- Warranties and the receipts related to them
- Medical bills (In case of insurance disputes or payment errors.)
Never Throw Away
- Marriage licenses
- Birth certificates
- Estate documents
- Inheritance documents
- Beneficiary forms
- Adoption papers
- Death certificates
- Records of fulfilled mortgages
- Birth certificates
- Social Security cards
- Marriage certificates
- Passports
- Legal filings
- Military records
For more information, visit the IRS website for Topic No. 305, Recordkeeping.
The information provided is for illustration purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action to be taken. These analyses have been produced using data provided by third parties and/or public sources. While the information is believed to be reliable, its accuracy cannot be guaranteed. MONTAG employees do not provide legal or tax advice. For specific legal or tax matters, you should consult with your own legal and/or tax advisors. There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, and money market funds involve risk of loss. Loss of principal is possible.