How Long Should I Keep Personal Financial Information
The IRS requirements for personal finances and taxes is that you maintain records for up to three years after the initial date of filing. The problem with this is that if the IRS finds that they need to go back farther than that to verify information, they can ask for tax information past three years. For this reason, accountants often recommend keeping personal financial information for up to seven years. The IRS will only do this if they believe your figures are off by 25% or more. You should keep pay stubs for a year after the tax year they are part of, along with the W-2. After one year, destroy the stubs but keep the W-2 and tax filings.
Banking and Investments
Credit card receipts should be kept until you get the bill which shows the charge. Banking, retirement and investment statements should be kept until the yearly report statements arrive. Then destroy everything but the yearly statements. Keep the yearly statements for up to seven years. If the IRS does
an audit, these are your supporting documentation to your tax filing.
Utility payments are also part of your personal financial information. Keep these for up to a year to ensure proper credit of your account. You can keep these over multiple years so you can observe changes in utility cost through comparison. Utility bills are not required for tax information. If you are applying for any type of state or federal aid, they will want to see up to six months of utility payments; this is especially true for heating assistance programs.
Housing or Big Ticket Items
Any major purchase, such as homes, cars, furniture, or jewelry are usually covered by some form of insurance. Because of this, you should keep all purchase records of any items listed in any insurance documents for as long as you own the item. Payments for repair or service should also be kept for as long as you own the item. In case of an insurance claim, the provider will ask for proof of the items value which will be shown in these records.