Posted: 5/22/2005 4:00:58 PM EDT
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I'm swiming in papers, I gotta get rid of some of this. How long do you keep: Carbon copies of checks/cancelled checks (which ever one you have)? Bank statments? Bank deposit carbon copies? Credit card receipts? Credit card statements? Car loan/lease statements? Yearly income tax packages? Various utility, phone, cable, etc. monthly statements? Paycheck stubs? If ever audited, you are going to need some of that stuff, right? So what do you keep and how long before destroying it (shred then BBQ)? |
A friend of ours who does our taxes (and is a certified CPA) says you don't have to keep bank records/checks any longer than 7 years. I have a file system of twelve large manila envelopes, one for each month. All the credit card, ATM, gas, etc. reciepts, as well as the credit card statements, phone bills, etc., goes in the envelope. At the beginning of the month, I take everything out of the envelope (all of last year's April stuff, for example), go through it for reciepts I need to keep for warranty purposes, and shred the rest. Once a year I pull all the old insurance documents and shred those as well. My way of thinking is, if I haven't needed it in a year, then there aren't any questions about it and if I need it further back than that, the bank or company would have a record of it. ETA: I do keep the income tax packages for every year, though. Just in case. |
What would happen if you don't show the IRS this stuff? Ya know, a boating accident 
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This is my opinion, satisfaction guaranteed - twice back what you paid if you don't like it.
If necessary for tax purposes, 7 years, otherwise they don't have much value beyond a year, but you could always go 2-3 years to play it safe.
Same as above.
If you are concerned the IRS might do a lifestyle audit, or an income reconstruction audit (where they claim all money deposited into your bank account is income unless you can prove otherwise), then 7 years. Otherwise, unless you have some other reason to prove the details of the deposit, they don't hold much value once the bank statement arrives and you verify all the deposits have been made correctly.
Tax purposes - 7 years. Warranty purposes - until the warranty runs out. Receipts for gas and food at Hooters - until the statement shows up and you verify it's correct.
Same as above. They serve no real purpose otherwise beyond a year, but if you're a packrat, keep them 3 years.
Tax purposes - 7 years. Otherwise, until you get a letter indicating you have paid in full and don't have anything due to the leasing company/lender.
Tax returns - until you die. Supporting documents for the returns - 7 years minimum, or until you die if they don't take up much space.
Tax purposes - 7 years. Otherwise, I shred mine after I see that the last payment I made posted correctly.
At least a year, to verify against your W-2.
The IRS can audit your return as follows: 3 years - normal audit period, starts the date you file or date return is due, whichever is later 6 years - if the IRS determines you understated gross income by 25% or more, the audit period doubles forever - if the IRS determines your original return was fraudulent, even if you amend it later to be 100% correct The IRS can also audit an old year that would normally be untouchable if something occured that affects a year they can audit. For example, if you had a Net Operating Loss in 1989 and have been carrying it forward ever since, and you take an NOL deduction for 2004, they can go back an audit 1989 if they want to. If they think your NOL calculation from 1989 was bogus, they can't change the old years, but they can deny the carryforward in any current, open year. |
If you get audited you mean? That's simple - the IRS just disallows whatever it was they questioned, and you pay more tax and penalties. The tax system is the only area where you have the burden of proof - the IRS needs to merely suggest or question a deduction, and it's up to you to prove your innocence. If you can't meet that proof, too bad, you lose. |