How Long to Keep Tax Records and Other Documents

Keep for less than a year

In this file, store your ATM, bank-deposit, and credit-card receipts until you reconcile them with your monthly statements. Once you’ve done that, shred the paper documents (to avoid ID theft) or securely trash electronic files unless you need them to support your tax return. Keep insurance policies and investment statements until new ones arrive.

Keep for a year or more

You’ll want to hold onto loan documents until the loan is paid off. That will often be for more than a year. Then toss those papers out. If you own one or more vehicles, hold onto the titles until you sell them. If you have investments in stocks, bonds, mutual funds, or anything else, keep the investment purchase confirmations until you sell the investment so you can establish your cost basis and holding period. (If that information appears on your annual statements, you can keep those instead.)

Keep for seven years

If you fail to report more than 25 percent of your gross income on your tax returns, the government has six years to collect the tax or start legal proceedings. So when it comes to determining how long to keep tax records – electronic and paper – we recommend seven years, just in case.

Keep forever

Essential records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept indefinitely. Also hold on to defined-benefit plan documents, estate-planning documents, life-insurance policies, and an inventory of your bank safe-deposit box (share a copy with your executor or your attorney).

BONUS TIP:   How to Store Your Files

Use a fireproof safe or password-protected electronic file for the following: Bank and investment statements, estate-planning documents, pension information, insurance policies, pay stubs, tax documents, and your safe-deposit box inventory list.

Invest in a safe-deposit box for papers that can’t be easily replaced: Original birth and death certificates, Social Security cards, passports, life-insurance documents, marriage and divorce decrees, military discharge information, vehicle titles, an inventory of your home’s contents (in case you need to make an insurance claim), and loan documents.