Keeping Records

December 30, 2004 7:32 AM

What is your personal records retention policy (taxes, paystubs, account statements, receipts, other important documents)? What an exciting topic! More inside.

I have been doing Google searches and talking to friends and co-workers and the recommendations are all over the map. Some say 10 years for tax records, some say lifetime. Some say all paystubs for 3 years, some say just the last one for the year. Some say all account statements for 3 years, some say none at all, unless you need them to get a mortgage or other loan.

posted by internal to Home & Garden (17 answers total)

The financial advisor my husband and I went to said to save 7 years of tax records and 3 years of all else.

I think we save about 10 years of everything, though, because we're both a little neurotic.
posted by Sidhedevil at 7:47 AM on December 30, 2004

You are required to have a copy of your tax return for seven years. You can amend it yourself for up to three, but the IRS can call it into question pretty much forever (so it wouldn't hurt to keep it on hand).
I've never heard about keeping paystubs, although keeping the final one from each year is a good idea incase your W2 is questioned, or you don't get one.
Keep your W2 copy for as long as you keep your tax return, with the return.

As for account statements (bank, broker, et al), I'd say the final for the year, clipped with the tax return, is wise. Or your 1099 statement.

Do I do this? Hells no. But I make less than twenty thousand a year, and have no dependants. There's nothing they could call into question on my return, it's as basic as can be.
But I also work for a major tax-prep company, so I tell other people to do this stuff all the time.
posted by Kellydamnit at 7:51 AM on December 30, 2004

...but the IRS can call it into question pretty much forever...

Yup. They can go back to day one if you are ever on their radar. But how likely are you to do something to warrant their attention?
posted by piskycritter at 8:02 AM on December 30, 2004

I save every "official" record (including utility bills, pay stub, credit card & bank statement, etc) for at least a year. At the end of the year, I go through them and decide what I can throw away (for example, saving just the year-end summary of brokerage statements and throwing away the quarterly statements).

I have saved all tax documents and plan to keep them around forever.

I have saved myself a lot of time and stress at tax time, and on other occasions, by having this stuff filed. I've moved about ten times since I started working and never thought it was a hassle to move a box or two of files.

My philosophy: if you have the room, it doesn't hurt to save things. Put 'em in a box in the basement, or under the bed, and forget about them.
posted by googly at 8:05 AM on December 30, 2004

My personal records retention policy is basically 'If I really need it, I suppose I can pay someone to get a copy.'

I'd probably keep copies of my tax returns, but they're prepared by my mother, who writes tax for H&R Block, and she and they both keep copies. For bank statements, I rarely even open them, never mind keep them. I track my transactions on line, so would know if there was anything strange on my account and see no real need for the paper records. I have a large but incomplete selection of pay stubs hanging around for no apparent reason. I can't see as how they're particularly useful, but I haven't thrown them away yet.
posted by jacquilynne at 8:10 AM on December 30, 2004

My policy is simple: destroy everything at the earliest possible opportunity. Sometimes "earliest possible" is before I even receive it; I don't have bank statements nor cancelled checks sent, and I don't receive a pay stub. Those things I can download at work. Tax returns are stored electronically, off-site. Secondary tax forms are promptly lost.

Receipts are kept only through a reasonable burn-in period for a purchased item. Bills are destroyed as they are paid.

Generally, if it's made out of paper, I need a very, very strong reason to retain it. It is way too easy to become overwhelmed with paper records, particularly if you don't have a secretary taming it for you. The best you can do is hope to kill it before it spawns, so I shoot first and ask questions later when it comes to recordkeeping.
posted by majick at 8:23 AM on December 30, 2004

Seven years for tax, three years for incidental, and indefinite for any company related personal record keeping (in my field it's actually life of the affected employee plus thirty years).

Due to my career I document like crazy, retain it in fireproof safes, and also distribute the information. You could put me on the paranoid side, but I've seen documentation save a lot of money.
posted by sled at 8:47 AM on December 30, 2004

But I also work for a major tax-prep company, so I tell other people to do this stuff all the time.

I like your honesty! I'd hire you if I wasn't in the same boat. :)
posted by Civil_Disobedient at 9:10 AM on December 30, 2004

Pretty much forever, but I'm not quite 30 yet, so that may change as I get older.

I keep the current year's records in my filing cabinet, and then at the end of every year I transfer everything to a storage box and in the basement it goes.
posted by alana at 9:29 AM on December 30, 2004

Good advice here, and there's more at this similar thread a few months back.
posted by pants at 9:49 AM on December 30, 2004

I've been doing my taxes electronically for the past 4-5 years. At the end of the whole process, you get a pdf of your tax return and I keep multiple copies of those PDFs digitally locked up. I keep paper copies of my W2's back about 4-5 years [I don't tosss them but I sometimes lose them]. I don't keep paystubs or almost anything else that has my social security number on it. I save all my medical records. I temporarily share a house so I don't keep phone/utility/gas bills where I live. I keep bank statements, credit card statements, and things like power bills at my other house for a few years. I save all my cancelled check receipts [I use duplicate checks, my bank has viewable copies of every check I've written with them online viewable for free] and check registers pretty much since I've had a checking account [1988?] but I don't write many checks and when I do, I do it online. I throw away all receipts pretty much immediately unless I think I'm going to have to return the item, which is something I can usually guess with pretty good accuracy. My boyfriend is a receipt hoarder and every time he goes into his pockets or his wallet, receipts fly out in every direction. I find them tucked into every crevice in the house.

It's funny you ask this because we just got a letter from the Wisconsin tax people asking for a copy of my boyfriend's taxes from 2001. Actually, they didn't need a copy, they just needed an affadavit that he filed them and the amount of his refund and/or taxes due. He filed electronically but he has the records on some old computer we don't use anymore, so we have to go borrow a monitor so that we can boot the thing up and try to find the tax returns. His former bank wants $10 to send him three old statements, so we're trying this angle first.
posted by jessamyn at 10:05 AM on December 30, 2004

On 1/1, I label a box with the year. As stuff is generated or arrives in the mail, it goes into the box. On 12/31, I seal the box and send it to my parents to store in their barn.
posted by mischief at 12:05 PM on December 30, 2004

I have alan's approach and I keep things for 10 years. Every month I toss everything (bills, statements, reciepts, etc.) into a new file folder in my file folder sized desk drawer. At the end of the year I add a 13th folder for year end stuff. After I do my taxes at the end of January I toss the 13 folders into a storage box and up to the attic it goes. Then I pull down ten years ago's box and shred it.
posted by Mitheral at 12:18 PM on December 30, 2004

I'm with majick except I have every tax return I've ever filed and the W-2s for the same years. I keep pay stubs until I file my return, then they're gone. Pretty much everything else is in the wastebasket as soon as I've reconciled the bank accounts each month, and I don't receive paper bills for most things because they're paid automagically. My feeling is that I'm living by the rules; if they want to audit me, they're going to have to come up with something pretty awesome to corner me with, and if necessary, I can get copies of everything from my bank, creditors and utility companies. But like I said, good luck to the IRS if they can find something on me.
posted by suchatreat at 12:20 PM on December 30, 2004

the IRS can call it into question pretty much forever

In general, the IRS has 3 years from the date of the return to "assess" additional taxes.

If the understatment of income on a return is greater than 25%, the statute of limitiations jumps to 6 years.

If you don't file, the statute of limitations does not start running so the IRS has no limitiation.

Since the IRS got pounded by Congress for aggresive audit activities in the mid-90's, the audit rate has dropped to below 1%.
posted by probablysteve at 12:48 PM on December 30, 2004

Every year when I start putting together papers for my tax preparer, I take all of the bills, statements, and receipts from the past year (which I keep in an accordian file during the year, as they come in), organize them, and put them in a big envelope for that year. A copy of the finished tax forms go in that folder too, when ready. Then I tie it shut, stick it on a very remote shelf with its brethren, and forget about it.

I recently threw out my >7yo envelopes.
posted by adamrice at 4:16 PM on December 30, 2004

Mitheral, alan and mischief have it right. It's kind of a pain in the arse to keep all that stuff, but organization keeps the hassle to a minimum.

I used to work for a major Savings & Loan in the mortgage loan department. You'd be amazed at what sort of "alternative" documentation can help you get a loan.

I've also gone through the hassle of becoming a Canadian Landed Immigrant. I had to go back 10 years for information. Thank goodness my mum (22 years, and counting, at the same S&L I worked at) keeps good records.
posted by deborah at 9:05 PM on December 30, 2004