What to keep for good, what to keep for a few years, and what you can shred once it has done its job.
Most household paper can go sooner than people think, and a small set should never go at all. Vital records and signed legal originals stay for good. Tax records follow the IRS clock, which is usually three years. Statements and bills can go once they have done their job.
The harder part is not the rule, it is knowing where each paper is when someone needs it. Write that down as you sort.
Some papers are either impossible to replace or slow and expensive to replace. Keep the originals, keep them together, and make sure two people know where they are.
For each of these, the most useful thing you can write down is where the signed original sits. A will nobody can find does the same job as no will.
The IRS generally has three years from the date you filed to question a return. That is why three years is the standard advice for returns and the records behind them.
| Situation | Keep for |
|---|---|
| Most returns and their supporting records | 3 years after filing |
| You left out income worth more than 25 percent of what you reported | 6 years |
| You claimed a loss from worthless securities or a bad debt | 7 years |
| You did not file, or filed a fraudulent return | No limit |
Many people keep returns for seven years as a simple rule that covers nearly every case. The return itself is small, so some keep every one they have ever filed. That is fine. The receipts behind old returns are what fill drawers.
Some records are not tied to a tax year but to a thing you own. Keep them as long as you own it, then for three years after the return that reports the sale.
| Paper | How long |
|---|---|
| Pay stubs | Until they match your year-end W-2 |
| Bank and credit card statements | 1 year, unless you need them for taxes |
| Utility bills | Until the next one shows the last was paid, unless you deduct a home office |
| Medical bills and explanation of benefits | Until insurance has settled them, longer if you deduct medical costs |
| Insurance policies | While the policy is in force |
| Old life insurance policies | Until you know they lapsed or paid out |
| Vehicle titles | As long as you own the vehicle |
| Warranties and receipts for large purchases | As long as you own the item |
When in doubt, scan before you shred. A scan is not a substitute for a signed original, but it is enough for nearly every statement and bill.
Anything with an account number, a Social Security number or a signature goes through a shredder. Many towns and banks hold free shredding days.
Most households have one drawer, box or closet shelf where everything goes. Sorting it takes an afternoon.
Once a year, repeat the tax step. It takes ten minutes when the drawer is already sorted.
Ask your tax preparer before shredding anything tied to a return that might be questioned, a business, or rental property.
The Life Binder has a page for how long to keep each paper and a master list of where every original is kept. Fill it in as you sort.
Download the Life Binder (PDF)Paper goes stale. Hubstone holds the same record and keeps it current, and you choose who sees each page.
General information, not legal, medical or financial advice. Requirements differ by state.