How long to keep tax records and other papers, you ask?
As the temperatures start to drop in different areas of the country, I’ve had clients start in on paper purging and organizing projects so that they can stay warm and comfortable indoors and curl up next to the fire – but still get something done. October also happens to be National Clean Out Your Files month, so what a perfect time for purging! A common question that they’ve had is about paper retention, specifically…how long to keep tax records and other papers they’ve got hanging around?
In a nutshell, papers you should save:
*proof of identity and citizenship – forever
*proof of ownership and insurance – for as long as you own the object (this can be digital)
*legal documents – indefinitely – It’s best to keep legal papers with original signatures; you can still scan to have a backup.
How long to keep tax records:
*proof of your tax numbers (supporting docs for your tax returns) – 7 years – This can be digital. You’ll hear 3-7 because the IRS asks for three years’ worth of docs when you get audited, but if they find anything they have the right to ask for up to 7 years.
*your tax returns – forever (just the actual return, not all of the supporting docs just mentioned)
How long to keep house purchase and refi docs:
*Keep all closing docs for at least 7 years.
*Keep the payoff notices in at least digital format forever.
*Keep the current closing docs with original signatures while you own the house + 7 years after you sell it.
If you only have one box of closing docs and house papers, that’s a small footprint.
The disclaimer that consultants always give is that you should check with your tax and/or legal representative because everyone has a different situation, but in general the above will help guide you with what documents to keep.
For more info about how long to keep tax records – and other productivity tools and tips – from time management keynote speaker Helene Segura, click here.