During tax season, you probably found yourself surrounded by piles of papers — and wondering how long to keep all that stuff. For tax documents — and all your other financial paperwork — here’s your answer.
What, How Long, and Why
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What: Tax returns (including receipts and supporting documents)
How Long:
Up to six full years
Why:
The IRS can audit a return up to three years after you’ve filed. The agency can challenge your return for up to six years if it suspects you under-reported your income by 25% or more.
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What: IRA contribution records
Why:
Keeping these forms — like IRS Form 5498 and 8606 — may prevent you from paying too much tax when you tap your retirement stash.
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What: Investment and real estate records
How Long:
Seven years after you sell
Why:
They help track your cost basis — and the taxes you owe when you sell; shred your monthly statements and save the annual summaries.
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What: Bank statements and checks
How Long:
One month to seven years, depending on whether your bank has them available online.
Why:
You could need them if you’re audited by the IRS. If you haven’t already, switch to receiving your bank documents online. Your bank may have past statements available online.
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What: Credit card statements and bills for non-deductible items
How Long:
Shred immediately after the next statement arrives
Why:
You don’t need them once you confirm the charges and have proof it was paid.
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What: Form W-2: Wage and Tax Statement
How Long:
Until you start receiving Social Security benefits
Why:
Usually your best proof of earnings for Social Security
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What: Pay stubs
How Long:
Until the end of the year
Why:
Not needed once you get your W-2
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What: Insurance policies
How Long:
Until they expire — except for liability policies with "occurrence" coverage
Why:
Occurrence-based policies cover you for damages that occur while the policy was in effect — even if the claim happens after coverage expires
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What: Receipts
How Long:
- Day-to-day debit/credit: Toss after confirming the amount charged is correct.
- Big-ticket item: Keep with other purchase documentation for proof of value in case of loss or damage.
- Charitable donations: Store and keep for tax-filing purposes.
Why:
Depending on the type, amount and reason for the purchase, they may be necessary for insurance- and tax-filing.
Where to Keep Them
No one wants to turn a closet or attic into a fire hazard, so save strategically.
Keep original contracts like life insurance policies and legal documents like wills in a fireproof safe/box.
Separate your temporary tax documents and permanent documents (IRA contribution Form 8606, Forms 5498 and 1099-R for IRAs) into different files by year. Keep the papers until all distributions are made.
Group your receipts and warranty documents together in a single storage box/file.
Automate and Go Green
Reduce future clutter — and save some trees — by going electronic.
Store USAA documents simply, securely and electronically with USAA Documents Online.
Arrange for utility and other bills to be sent by e-mail.
Automatically pay your bills electronically through USAA Web BillPay.
Use a scanner to replace key paper documents with electronic versions. Be sure to create a back-up file that’s stored in a separate location.
