How Long to Keep Paperwork

Hands down the number one thing my clients need help with is paper clutter. It can be straight-up stressful deciding what to keep and what to shred. And we can often worry about not having what we need when we need it later down the road.

Thankfully, there are some easy “rules” to follow when it comes to how long you should keep papers. Let’s break it down by the most common types of paper you’ll run across in your own home office. But first let's cover a few common questions.....

What about digital files?


Many of these guidelines apply to digital files as well. Keep them just as long as you would the paper ones. And, as always, when storing anything digitally you should always have two copies of everything (for example one on the laptop and one on an external hard drive).


I recommend receiving as many bills and statements electronically as possible. For obvious reasons, they take up less storage than physical paper. But also these files can be easier to organize and more quickly found when needed.


What to do with the unneeded paperwork?


Please consider shredding all items that contain any personal information. You wouldn’t want these types of things to get into the wrong hands. A good rule is: when in doubt, shred it!


How should I store paperwork?


There are really just a couple things you need to create a functional paperwork storage system. These are listed below. Throughout the article I give suggestions on where to store certain types of paperwork.


  • one banker’s box (like these)

  • one large envelope (letter size)

  • one large package of enveloped (legal size)

  • one file box (like this one)

  • one large box of file folders

  • one small box of hanging folders


Disclaimers:


This article provides a general guide on what works for my household. When it comes to specifics especially tax documents, always refer to a reputable tax professional for guidance.

Also this article is based on paperwork found in the average household and does not offer guidance on business documents. Check with your tax professional on the standard and legal practices of your unique industry.


Lastly, this article follows general United States tax rules and should not be used as a guide for any other country.


Types of Paperwork

Receipts

One month to indefinitely


Receipts are one of those daunting categories because there's such a wide range of "types" of receipts. For general household goods, you typically want to save for the length of the return period (typically 30 to 90 days). Ninety days will also give you enough time to reconcile the physical receipt to your credit card or bank statement.


There are though receipts for larger ticket items that you may want to keep longer. Proof of purchase can be important for warranty or insurance purposes if something is later stolen or damaged. You may also want to keep receipts for any repairs or updates to your home in case you need proof for an insurance claim.


Additionally, any receipts that important for tax documentation should be kept with the returns and for that length of time (see below)

Where to store


There’s any easy way to store receipts that will help you keep them all together should you need one. In a common area of the home (mine’s a kitchen drawer), store one, large envelope (like the one letters are sent in). Just place all receipts in there and go through them when the envelope becomes overflowing.


If you like to balance your checkbook to your receipts, place them in a little container by the computer. Once you have that receipt reconciled and recorded, move them to envelope. For tax-related receipts, store them with the tax returns themselves. For larger ticket items or home improvement receipts, keep them in a fireproof box.


Paid Bill Statements

1 year or less, typically


Most bill statements don’t need to be kept much longer than a month or two. Typically once you confirm on the next bill that a credit was applied, you can shred the previous one. But sometimes a dispute arises month later so keeping a year’s worth of bills can be helpful.


For bills that are treated like receipts and used for tax documentation, keep these longer and stored with your tax returns.


Where to store

Bill statements are the perfect thing to receive electronically. To store these on your laptop, create a file for each year (ie 2021). Then create a subfolder for each unique bill (ie water, credit card, phone). Store all bills in the corresponding folder.


For paper statements, keep a separate file folder for each unique payee. Then store the statements accordingly. Don’t forget to get rid of the oldest statement when you add a new one. This will keep your folder up-to-date.


Owner’s Manuals

Never to indefinitely


Use your best judgement with this one. For most things, a manual can easily be found on the manufacturer’s website and you can toss the paper copy. No matter what, you only need to keep the manual for as long as you have the item.


You may also want to consider holding onto the manual if you plan on selling the item in the future and want to include that with the purchase.


Where to store

What has worked for me for years to store my manuals is a banker’s box. Yes, a cardboard box. Just toss any manuals in there and go through it periodically removing the ones for items you don’t own anymore.


I prefer this option over file folder because it allows you to keep bulkier stuff in there too such as bolts/hardware and the boxes to items.


Warranties

Indefinitely (until no longer own product, or the warranty expires)


Keep all warranties until you no longer own the product or until the warranty expires, whichever comes first. Staple the proof of purchase to the warranty sheet so you have them together when you need them.


Where to store

I store warranties along with manuals inside the banker’s box. You may also want to keep warranties for larger ticket items in a fireproof box.



Bank Statements, Cancelled Checks & Other Bank Receipts

1 to 3 years


You should keep all bank statement for at least one year. Some financial institutions suggest three years so base this off your own level of comfort. One thing to consider is how difficult it would be to retrieve a document from your bank should you need one.


Other types of bank receipts and documents such as ATM receipts, deposit slips, etc. only need to be kept until they’re reconciled to your most recent bank statement.


You don’t need to keep cancelled checks for much longer than the typical receipt, but there could be exceptions. This would include proof of purchase for warranties, large ticket items to show value for insurance, or for tax documentation.


Where to store

Bank statements should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder for the year. Then create a subfolder for each financial institution.


For a physical system, create a file folder for each financial institution and categorize alphabetically.


Credit Card Statements

1 year - unless you carry a balance


Keep credit card statements for the same time period as bill statements – one year. You can even let go of them more frequently once you verify the account has been reconciled and your payment was credited.


You can keep the statement longer if you need it for tax documentation, warranties or insurance purposes.

If you carry a balance on your credit card, consider treating them much like loan documents. Keep the documents much longer at least until the “loan” is paid in full.


Where to store

Credit card statements should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder for the year. Then create a subfolder for each credit institution.


For a physical system, create a file folder for each creditor and categorize alphabetically.


Pay Stubs

1 year or less


Keep pay stubs until you receive your official W-2 or 1099 tax document for the year.


Where to store

Credit card statements should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder for the year. Then create a subfolder for each employer.


For a physical system, create a file folder for each employer and categorize alphabetically.


Medical Bill Statements, Receipts & Insurance Paperwork

3 years


I personally keep all medical statements, bills, receipts and insurance paperwork for three years. The whole medical billing system seems to take longer than others and you never know when issues can crop up.


Keep them longer can be even more essential if you have lots of different types of expenses or have deductions or credits to your tax return or if you've had billing issues with a particular medical provider in the past.


Where to store

Medical bills and receipts should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder for the year. Then add all receipts and statements to that same folder.


For a physical system, create a file folder for the yearly statements and receipts. Once the year is over, empty all contents into a legal-size envelope with the year labeled on the outside. Keep this folder in your long-term paperwork storage.


Tax Returns & Supporting Documents

7 years or longer


Keep tax returns and all supporting documentation (spreadsheets, receipts and other supporting documents) for seven years. The IRS has the right to audit most federal returns for up to 3 years from the date of filing. But there are exceptions which lengthen the time frame to six years in some instances of gross underpayment, and to indefinite when there is fraud or failure to file a return.


While the general rule is to keep returns for seven years, there are instances in which you may want to keep them longer. For example, you may need to refer back to older returns if you own a home, have rental or business property that you are depreciating over several years, or have a non-deductible IRA contribution.


Where to store

Tax returns should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder for the year. Then add all receipts and statements to that same folder.


For a physical system, create a file folder for the yearly statements and receipts. Once the year is over, empty all contents along with the tax return into a legal-size envelope with the year labeled on the outside. Keep this folder in your long-term paperwork storage.


Loan Documents, Contracts & Insurance Policies

Indefinitely


Keep loan documents (and proof of payments) for the life of the loan. Then keep the payoff statement forever. Loan documents include, but isn’t limited to, mortgage documents for your home or a rental, purchase of a vehicle and bigger ticket items like boats, furniture or anything else financed.

Contracts should be stored for the entire period that the contract is valid. You should also keep for a few years after in case any claims on the contract should arise.


Lastly, store all insurance policies, such as for your car, home, umbrella policies, and also things like title insurance indefinitely. You never know when claims will crop up.


Where to store

Each insurance policy should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder for the year. Then create a subfolder for each insurer.


For a physical system, create a file folder for each insurer and categorize alphabetically.


Home Purchase, Sale & Improvements

Indefinitely


Both purchasing and selling a home comes with lots of tax implications. It may seem daunting to save everything over the years but really is a necessity when it comes time to sell.


Keep all documents related to your home's title, mortgage documents, and receipts for major home improvements together in a file.


Where to store

Create a folder for each: mortgage, home improvements, and title.


Vehicle Titles & Maintenance Records

Indefinitely, for as long as own vehicle


Keep a purchase documents, warranty, registration and maintenance records for the vehicle for as long as you own it.


Where to store

Each vehicle should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder called “vehicles”. Then create a subfolder for each vehicle.


For a physical system, create a file folder for each vehicle and categorize alphabetically.


Retirement Statements

Indefinitely


Keep documents related to retirement accounts indefinitely or at least until all of the money has been distributed from them. This becomes even more important if you've made a nondeductible contribution to an IRA. You’ll want to keep records to prove that you already paid tax on this money when the time comes to withdraw it.


As far as monthly or quarterly retirement statements you should keep them until you can reconcile with the yearly statement. Then keep the yearly summaries until you retire and are paid the money, or when you close the account, whichever comes first.


Where to store

Each retirement statement should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder called “retirement accounts”. Then create a subfolder for each one.


For a physical system, create a file folder for each account and categorize alphabetically.


Investment & Brokerage Statements

For the life of the investment, plus 7 years


Many times we often have paperwork for investments we purchase outside of our retirement plans such as a Roth IRA. For tax purposes keep all the paperwork necessary to document your investment, show proof of purchase and how much and when it was sold. Keep all records for the investment plus seven years to be reported on your tax returns.

Where to store

Each investment should have their own folder – either in your file box or on your laptop. For electronic copies, first create a folder called “investments”. Then create a subfolder for each one.


For a physical system, create a file folder for each investment and categorize alphabetically.


Personal Identification & Records

Indefinitely

You should keep all vital records indefinitely. This includes birth certificates, social security cards, wills, divorce records and passports.


Where to store

I keep all of these documents in a fireproof box. Some may also choose to keep originals offsite in a safety deposit box with the copies in a fireproof box.


Here's Your Free Printable Paperwork Cheatsheet


Check out this printable cheatsheet showing the time frames that you need to keep the different types of paperwork. Print one out and keep it in the file folder box. Keep another stored digitally on your laptop.

Click here to get your free cheat sheet:

Paperwork_cheat_sheet
.pdf
Download PDF • 217KB

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