Keep your tax records and all supporting documents for three years at a minimum; however, it's wise to keep them up to seven years. If the IRS believes you under-reported income by 25 percent or more, they have six years to challenge you. Other basic errors have a three-year statute of limitations. Keep paycheck stubs for one year and reconcile them with your W-2 statement. Assuming your W-2 is correct, destroy the stubs, and keep the W-2 with your supporting tax documents.
Keep quarterly 401k and other retirement plan statements for one year, until you receive the annual statement for each account. Reconcile the quarterly statements with the annual statement(s) to ensure the accuracy of the information. Assuming the annual statement is correct, discard the quarterly statements and keep the annual one for as long as you have the account. If contributions to your Individual Retirement Accounts are not tax deductible, keep the records for as long as you have the account. When you withdraw funds, you may need to prove that the taxes have already been paid.
Brokerage Account Statements
Keep brokerage statements until you sell the stocks. After they are sold, you will need to include the statements as supporting documentation with your tax return.
Keep records pertaining to the cost of purchasing your home or any repairs or updates for as long as you own the home. All records related to the sale of your house should be kept for six years.
Credit Card Statements and Receipts
Keep individual credit card receipts until your monthly statement arrives and reconcile the two to ensure the accuracy. Receipts may then be shredded, and any statements containing tax-related information should be saved with your supporting tax documents.
Keep most bills for one year, assuming you have proof of payment such as a canceled check. Bills for big ticket items, however, should be kept for as long as you own the item. These would include furniture, cars, expensive jewelry and appliances. You will need that documentation if you ever have to file an insurance claim.
Current year records can be kept at home in a box or file cabinet. Consider a fireproof file box or a safe deposit box for any records that would be difficult or expensive to replace. Destroy documents that are duplicated or not required, but do it safely. Periodically banks agree to shred documents for their customers, or purchase your own shredder. Don't take chances with identity theft.