When to Shred, When to Keep, What You Need to Know

GOOD TO KNOW
Patricia Hafermann • Benefit Specialist

No one likes the piles of papers that we all accumulate over the course of a lifetime, but it’s hard to know how long you should hang onto certain documents and when it’s safe to destroy them. Following is a good rule of thumb for managing your personal documents:

Tax Information and Returns: Generally there is a three-year statute of limitations for the IRS auditing a tax return. This means the IRS has a period of three years from the time you file your tax return to complete an audit. However, there is no limit for fraudulent returns and the IRS has six years to challenge your return if it thinks you failed to report income that amounts to more than a quarter of your total income. Therefore, you should keep your documentation for at least six years.

Credit Card Receipts: If the credit card receipts serve as evidence for tax-related purposes, refer to the tax information and returns paragraph above. If not, it is recommended that you keep your credit card receipts until you have received your credit card statement and are able to compare the two.

Insurance: Policy and claim information should be kept as long as the policy is in place.

Bills: In most instances, bills can be shredded once the canceled check from a paid bill has been returned. However, bills will need to be kept longer if claiming household expenses as a tax deduction. Also, one may want to keep bills for larger items for proof of value in the event of loss or damage.

Retirement/Savings Plan Statements: Statements from plans should be kept until you receive your annual summary. Once you verify the numbers, you can shred the quarterly statements. The annual summaries should be kept until you retire or the account is closed.

Pay Stubs: You should keep your pay stubs until you receive your W-2 form. Once you receive this form, ensure that the information matches. If it does, you can shred your pay stubs. Note that you may need to have at least three months of pay stubs if applying for a loan.

Permanent Files: You should keep wills, powers of attorney, birth certificates, marriage documents, military records, and social security cards forever.

If you have any additional questions, you may call Pat Hafermann, Elderly Benefits Specialist with the Aging and Disability Resource Center at (920) 467-4076.

Resource: Published with permission from the Legal Services Team at the Greater Wisconsin Agency on Aging Resources’ Elder Law & Advocacy Center


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