Advertisement
taxes

Trash That Paper

Which documents to toss, and which to keep.

Now that you've filed your tax return, naturally you should keep a copy for your records. But it's okay to chuck much of the other paperwork you've been accumulating over the past year, or longer.

Start by dumping all of your supporting documents for your 2002 tax return and earlier. The rule is to keep your paperwork for three years, and six years if you own a business. You generally can't be audited after that.

Advertisement - Article continues below

Shred and toss ATM receipts when the transactions appear on your monthly statement. The same is true for credit-card receipts, unless you need them for tax purposes (if you're writing off business expenses, for example). Throw away utility bills as soon as your payment shows up on the next one, unless you're claiming a home-office deduction.

When it comes to investments, hang on to any statements showing the date and purchase price of a stock or mutual fund. You'll need that information until you sell the shares.

Other than that, you can generally toss monthly statements if the tally agrees with your year-end report. But keep year-end statements, which also show how much of your dividends and capital-gains distributions you reinvested -- information you need in order to avoid being taxed twice when you finally decide to sell your shares.

-- Kimberly Lankford

Advertisement
Advertisement

Most Popular

How To Buy a Roth IRA When You Make Too Much To Qualify For One
Roth IRAs

How To Buy a Roth IRA When You Make Too Much To Qualify For One

With their tax-free growth and tax-free withdrawals, Roth IRAs are a great deal — if you qualify. If you don’t, well, there’s still a way to get into …
September 23, 2020
Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check
Coronavirus and Your Money

Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check

The deadline for seniors and veterans to request an additional $500 stimulus check for a dependent child is approaching fast. See how you can claim yo…
September 25, 2020
High-Tech Aids for Aging in Place
Caregiving

High-Tech Aids for Aging in Place

Apple Watch and other technology provides fast feedback, comfort for older users, and a powerful assist for caregivers.
September 23, 2020

Recommended

Most-Overlooked Tax Breaks for the Newly Divorced
tax deductions

Most-Overlooked Tax Breaks for the Newly Divorced

Filing taxes after a divorce can add yet another problem to an already long list of challenges. But here are some tips to make your return to single l…
September 18, 2020
When Are 2020 Estimated Tax Payments Due?
tax deadline

When Are 2020 Estimated Tax Payments Due?

If you're self-employed or don't have taxes withheld from other sources of taxable income, it's up to you to periodically pay the IRS by making estima…
September 11, 2020
How to Create Income for Life
Financial Planning

How to Create Income for Life

Having a paycheck you can depend on in retirement is more important than ever.
August 26, 2020
11 Tips on How and When to File an Amended Tax Return
tax returns

11 Tips on How and When to File an Amended Tax Return

What to do if you discover a mistake on a previous tax return (and other reasons for filing an amended return).
August 25, 2020