Experts say you should keep these forms until it’s time to file next year’s taxes so you can check them against the annual W-2 form you receive from your employer. If your workplace doesn’t deposit your paycheck directly into your bank account, then each check comes with a paycheck stub that lists information such as your gross pay, taxes, and other pre-tax deductions. There’s a chance you could deduct all or part of the cost as a business expense. However, if you’re self-employed, hold on to those bills until you file next year’s taxes. Once your payment is verified, you can dispose of the bills in most cases. That could mean waiting until you get the next month’s statement or just checking your account online after a couple of days. Other BillsĪfter paying your utility, cable, and cell phone bills for the month, hold on to them until you can verify that the payment has gone through. However, if the statement includes purchases you’ll be deductingon your taxes, keep it on file with your tax documents. If you need a copy of it later on – for example, to verify a purchase – you can get one from the credit card company. If you plan to keep a receipt for either of these reasons, make a copy of it on plain paper and file that since thermal-paper receipts tend to fade over time.Īs for the credit card statement itself, you can probably toss it after paying it. You can use them as proof of purchase if you need to file a warranty claim, or to prove the cost of an item if you need to file a claim for loss or damage on your home insurance.
It’s also worth holding on to receipts for large purchases, such as furniture, appliances, electronics, or home improvements. However, if they’re for items you plan to claim on your taxes, you should file them in your tax information folder instead. Once you’ve checked your monthly statement, you can dispose of the receipts in most cases. That way, you’ll be able to dispute any charges that aren’t legitimate or request a chargebackfor any items you ordered that you never received. Keep them until you get that month’s credit card bill and then check them against the statement to make sure it includes everything you purchased -and nothing you didn’t. When you make purchases with your credit card, don’t just toss the receipts in the trash when you get home. And Eva Rosenberg of MarketWatch, also known as “Tax Mama,” says your old returns and W-2 forms could be the only way to prove your income for a given year if there’s an error on your Social Security earnings statement. Eric Reed of TheStreet points out that the IRS can audit you at any time in suspected cases of fraud or for a return it claims was never filed. Some experts argue it’s worth holding on to your tax returns themselves forever.
Hold on to any bank records, receipts, and canceled checks that show you had these expenses so that you can prove it in case of an audit. That includes your tax return itself, supporting forms such as your W-, and any documents related to items you claimed as deductions, such as: Instead, McBride tells Consumer Reportsthat you should just keep all tax-related records for at least seven years. However, according to Greg McBride, chief financial analyst at Bankrate, there’s no need to bother with all those details. The IRSrecommends keeping both your tax return and all material related to it “until the period of limitations for that tax return runs out,” and it provides a detailed list of situations in which that period could be anywhere from three years to forever. The Internal Revenue Service (IRS)could audit your tax return for up to three years after you file it -or up to six years if it suspects a significant error -and if it does, you’ll need those documents. When you finish filing your tax return, you can’t just dump all the documents you used to complete it. Here’s a guide to storage times for different types of documents. There are some documents you should hold onto indefinitely, but there are others you can safely discard in as little as a month. If you had to keep every piece of paper that comes into your possession forever, from a grocery receipt to a parking ticket, it would soon take up so much room in your house that you and all your belongings would be squeezed out onto the street.įortunately, that isn’t necessary.