Keep bills how long

Many like to put off tax time but you will thank yourself for getting it done sooner rather than later.

It is recommended to keep all paperwork related to your tax for up to five years, just in case you ever need to show how you arrived at these figures. Your accountant should give you a list of all the paperwork they recommend you to consider for your tax return. Available here. The key to making tax time stress free is to keep your paperwork organised throughout the year. This will save you so much time and sanity.

There are two options in how to organise your files:. I chatted to Scotty about the best way to file her paperwork. Use the method that suits you, as this filing system is just for your records. I purchased this expansion file from Officeworks and used my labeller to place on labels for each month. If your business is bigger you may need to use some hanging files in a filing cabinet. Retirement plan statements: Hold on to your annual statements as long as you have assets in the accounts.

This will help ensure your eventual withdrawals are taxed the right way. For your IRAs, be sure to save Form — the document that shows if your contributions were deductible or nondeductible. Home-related documents: Keep your purchase documents, and also all home improvement records, which can be used to calculate your cost basis when you sell your home, potentially saving you a bundle in taxes. When you get a renewal, toss the old one.

When you pay off the loan, the lender will give you a payoff statement. Keep this forever, just in case some zombie debt comes back to haunt you. The important stuff: While you can replace the following documents, it will be a major headache.

Invest in a firebox or a safety-deposit box for:. If your computer ever gives you the dreaded blue screen of death, you need to be sure you still have access to your documents.

But, you say, you can access back statements through your online accounts. Depending on your filing circumstances, the IRS may be able to ask you for supporting documentation for three to seven years after you file a return. Knowing that, a good rule of thumb is to save any document that verifies information on your tax return—including Forms W—2 and , bank and brokerage statements, tuition payments and charitable donation receipts—for three to seven years.

You should also hold on to pay stubs so that you can use them to verify the accuracy of your Form W-2 when tax season arrives.

Otherwise, you can dispose of them as soon as you verify your payment was processed. You can also dispose of bank withdrawal and deposit slips after verifying them with your monthly statement. For physical documents, designate a safe, out-of-the-way place in your home to store all paper records that protects them from damage or theft. For digital records, be sure to archive and back up all electronic records. Use complex passwords to keep your account information safe. Make sure your username and password combination is different from the ones you use for personal email, online merchants and social media accounts.

Protecting your computer with antivirus software is also a good idea. Invest in a cross-cut shredder that will eliminate all traces of your personal information, or search for free shredding events in your community. Having paperless statements and documents can help reduce the risk of identity theft posed by lost or stolen mail. The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Please also note that such material is not updated regularly and that some of the information may not therefore be current.

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