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Question:


How many years do you need to keep your personal financials, like bank statements, tax returns, check stubs and credit card bills?
-Rosa1975


Answer:


A general answer is that you should keep records as long as you are required to or as long as you think it will help you to have them. Anything related to taxes – proof of deductible expenses, wages, retirement plan contributions, tax forms themselves – should be kept at least three years because that’s how long the Internal Revenue Service has to audit you if it suspects good-faith errors, and it’s also the time limit for amending a return.
 
You might want to keep evidence of retirement plan contributions even longer – maybe permanently – if you need to prove that taxes were paid on them or to document the years in which the contributions were made. It is also advisable to hang on forever to bills for big-ticket items for which there would be an insurance claim if they were lost, stolen or damaged. Other records, such as bank statements, need to be kept only until the next one is received. Scraps of paper like credit card receipts, check stubs and most bills can be tossed when the payments show up on bank statements.
 
One corollary of Murphy's Law is that you'll need something the day after you finally throw it away. You may therefore be reluctant to get rid of anything ever, but a happy medium these days is to keep digital records as backups. Just make sure they're in secure files that only you can access.
-Conrad de Aenlle



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