How long are you supposed to keep bank statements, tax returns, etc. on file?

March 20, 2005 1:18 PM

I'm trying to organize all that paperwork that's piling up in my home, but I'm also trying to simplify my life and reduce clutter.

Here's a list of stuff that I think I should be keeping on file: tax returns, work related investments (e.g. 401(k)), car insurance statements, student loan paperwork, credit statements from closed (paid off) accounts, monthly bank statements.

I don't currently keep copies of utility/phone bills.

A friend says keep for everything for seven years. I agree with keeping current records of open accounts (like student loans), but keeping seven years worth of telephone and electric bills seems a bit extreme. What about loans that have a 7+ year repayment--do I just keep the most recent seven years or do I keep everything for seven years AFTER the loan is paid off?

Is there anything else I should be keeping?

posted by luneray to work & money (7 comments total)

Check this out.
posted by keswick at 1:34 PM on March 20, 2005

keeping seven years worth of telephone and electric bills seems a bit extreme

Seven years of phone and electric bills should take up less than 2" of file folder space. Tossing the bills into the appropriate folder doesn't seem too extreme or time consuming. What's the harm in doing that?
posted by gluechunk at 2:34 PM on March 20, 2005

You should keep "everything" for seven years, where "everything" means "everything you need for your taxes." There is no reason whatsoever to keep a phone or electric bill for long unless you are taking a home office deduction or are in some other way writing it off.
posted by kindall at 3:16 PM on March 20, 2005

Utility bills can be useful for establishing that you lived in a particular place at a particular time. The only practical reason to do this that I know of is for residency for state school tuition, and for that you usually only need one bill, but I can imagine that there could be some reason to want to have more. Of course, I have no idea what that reason would be.
posted by advil at 4:10 PM on March 20, 2005

I throw out paid utility bills after 1 year since they are not necessary for taxes (unless you run your business out of your home). Around here, the utility bills have so much extra crap printed on them (multi-page length) that only one year takes up about an inch of folder space. I keep the complete tax folder (tax return and supporting materials) for 7 years back, and keep only the tax returns for earlier years.

For the student loan, you can get them to send you a statement that has the dates and amounts of all of your payments on it, so you don't have to save the individual monthly bills.

I saw this on Lifehacker today, which might be useful re organization in general.
posted by matildaben at 7:42 PM on March 20, 2005

Interesting timing on this one... I try to keep files updated, and will go through them regularly. On Saturday, I met with my accountant, and asked him this same question with regards to tax returns. And he advised me to keep all tax returns - forever. I'm sure the chances of one's needing a return from, say, 20 years in the past is slim, but what could it hurt? Mine take up less than 1" of file storage space.

But I have been thinking of reducing clutter when it comes to phone, utility, etc. bills. Keeping a record for purposes of proof of residence is a good idea. But I think I can do that without keeping ALL my phone bills - maybe a representative sample, or start/stop time. A 3" file of past phone bills is just too much!
posted by ObscureReferenceMan at 5:14 AM on March 21, 2005

Not a direct answer to what-to-keep, but as far as how-to-keep it: I was getting so fed up with the paper trail at home that I bought a "small business" OCR-oriented document scanner about two years ago and haven't looked back. At $650 it was no trivial investment, but it has allowed me to maintain my packrat tendencies while ridding my home of lots of paper.

I now scan most of my bills, notices, etc. and store 'em as searchable PDFs in a neatly organized directory structure on my PC. My workflow for this is so efficient now it hardly takes any time at all... the joy of processing mail and then quickly tossing it into the recycling bin or shredder -- while knowing that I've got a copy in case I ever need to refer to it -- has been value enough for me.

(For safety, I do make sure to archive the PDFs to DVD-Rs, approx monthly. And of course I still keep a paper file for critical documents, e.g. auto and home title.)
posted by skyboy at 6:54 AM on March 21, 2005