Spring Cleaning - What to Toss | Financial Blog Network

Spring Cleaning - What to Toss

Posted: 04 Apr 2008 | Categories: Finance

Spring Cleaning - What to Toss

Spring has sprung! For many people, this means it’s time for spring cleaning. While it feels great to get rid of the papers and clutter that have built up over time, it is important to remember that what you toss can increase or decrease your changes of becoming an identity theft victim.

Nobody wants to hold on to their financial records forever. If you did, you’d have mountains of paper-based records. However, it is not always easy to decide what to dispose of and what to keep. Here is a quick guide to what you can toss.

What to Shred Every Month

Credit card, ATM and bank deposit receipts can be tossed after you’ve checked them against your monthly bank statement.
Sales receipts for minor purchases, as long as you’re sure you don’t want to return the items.

What to Shred Every Year

Monthly bank and credit card statements.
Monthly or quarterly brokerage and mutual fund statements, after you’ve checked them against your yearly statement.
Monthly mortgage statements, after you’ve checked them against your yearly statement.
Phone and utility bills.
Paycheck stubs, after you’ve checked them against your annual W-2 or 1099 forms.

What to Keep For Seven Years

W-2 and 1099 forms.
Annual statements from credit-card companies.
Canceled checks and receipts for tax-deductible expenses, including medical bills, deductible business expenses, annual mortgage interest statements, etc.

What to Keep Indefinitely

Annual tax returns. The IRS has three years after a return is filed to audit a return; six years if a taxpayer omits more than 25% of gross income from his or her return; and an unlimited time if fraud is discovered.
Annual statements from financial services companies (i.e. 401k statements, mutual funds statements, etc.).
Insurance, housing, and purchase records. As long as they are active and for six years after they are sold, retain insurance policies, leases, titles, mortgage loan papers, property bills of purchase and receipts for major repairs and renovations.

Protect your Identity with IDFreeze, financial documents and receipts need to be disposed of carefully, not simply thrown in your household garbage. For your financial records, start with a good shredder. Shredding documents with any identifying information helps prevent “dumpster diving,” a practice that allows identity thieves to seize sensitive documents discarded by careless people.

Keeping your financial records in order is as important as cleaning out the garage, and probably won’t even take as long. A few hours over the weekend will ensure that your desk and file cabinets are well-organized and clutter-free, so you can go out and enjoy the spring season.

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