How long should I keep my tax and financial records? :: Wamhoff Financial & Accounting


How long should I keep my tax and financial records?

The 2014 tax season is wrapping up today, and one question that tax professionals answer on a regular basis is “How long should I keep my records?” While the answer may vary, there are some general rules of thumb you can follow. Bob Wamhoff, President of Wamhoff Financial Planning and Accounting Services, explains to Anthony Kiekow.

Tax Returns:

  • In most cases, keeping records for three years is sufficient.
  • Longer terms may apply in special circumstances. For example, if your return includes depreciation items, you’ll want to keep the returns at least through the depreciation period.
  • If you’re filing a claim that includes a loss from bad debt or worthless securities, keep those records for seven years.
  • If you haven’t filed your tax returns or have some sort of fraudulent situation, keep those records indefinitely.
  • Keep all employment tax records for at least four years after the date that the tax becomes due or is paid (whichever is later).

 

Investment Statements, Bank Statements:

  • You can keep your monthly or quarterly investment statements for a year, then shred them and keep the annual statements when it becomes available. Retain those annual statements until you sell the investments and no longer need them for tax purposes.
  • Keep bank statements for a period of one year, unless you need the statements for tax filing purposes.

 

Items to Keep Forever:

  • Birth certificates, marriage licenses, divorce decrees, passports, education and military service records.
  • Insurance documents
  • Social security cards

 

Disposing of Records:

  • Shred them!