1. Bank Documents - these include bank statements, deposit or withdrawal receipts. You only need to keep these until you do your bank reconciliations (hopefully monthly). After that you can safely shred your documents.
2. Receipts - Smaller purchases, such as clothing or other retail purchases should be kept for as long as the return policy of the store where you purchased from them. Most stores have a 90 day return policy. Once the return period has expired, you can throw away the receipts.
For major purchases, such as appliances, should be kept for the life for the appliance, in case of warranty or insurance issues.
3. Pay stubs and other income statements, like those from brokerage or retirement accounts should be kept for at least a year. These documents become vital for your tax returns. Having them all in one place will make doing your taxes much easier come tax time.
4. Tax documents need to be kept for up to 7 years. These documents include 1099s and W-2s, donation receipts, and other supporting documents for your tax returns. The IRS can audit your returns up to 7 years in arrears, so you'll need to keep these documents just in case.
5. Legal documents should be kept indefinitely. Documents such as birth certificates , marriage licenses, wills, investments, deeds, and passports are notoriously hard to replace, so be sure you keep them in a safe place. A safety deposit box works best, or a fireproof safe of your own. (In the meanwhile, keep documents in the freezer is a good temporary fireproof measure.)
If you are getting rid of documents, shred them. The majority of identity theft happens from personal documents being taken out of trash. If you do not have your own shredder, many banks will offer that service to their customers. (Note: many pet shelters will also accept shredded documents to be bedding to line animal cages.)
Still feeling like you're drowning in paperwork? Check your credit card company and bank to see if they'll issue online statements, to get digital copies of statements to reduce your own filing (and save some trees!).
Helping getting your paper filing system up and running is something Bumblebee PA can help you get under control. Contact us for a consultation about your needs.