With the long list of imagined home improvement projects we had dreamt up finishing while on vacation, we only completed one major project: emptying and organizing the closet. Hidden in the back of our walk-in closet were shoe boxes filled with financial documents accumulated over years of working as a freelance graphic designer; every receipt, invoice and a miscellaneous amount of "why the heck did I keep this?!" paperwork stored haphazardly and with the obsessive quality of a squirrel storing away nuts for the winter. Above is the greater portion of what was shredded over the span of two days (an additional 2 1/2 bags were thrown into recycling the first day)...
Starting Anew in the New Year...
What to Keep and What to Shred
Okay, so you admit you're like us and have a secret cache of papers and documents that is threatening to take over your storage/office but you're unsure what you can shred and what you should keep? Here's some tips from Jenny C. McCune of Bankrate of when to shred and when to store away:
- Taxes
- Returns
- Canceled checks/receipts (alimony, charitable contributions, mortgage interest and retirement plan contributions)
- Records for tax deductions taken
- Length of time to keep: Seven years
- IRA contribution records
- If you made a nondeductible contribution to an IRA, keep the records indefinitely to prove that you already paid tax on this money when the time comes to withdraw.
- Length of time to keep: Permanently
- Retirement/savings plan statements
- Length of time to keep: From one year to permanently
- Bank records
- Go through your checks each year and keep those related to your taxes, business expenses, home improvements and mortgage payments.
- Shred those that have no long-term importance.
- Length of time to keep: From one year to permanently
- Brokerage statements
- Length of time to keep: Until you sell the securities
- Bills
- Go through your bills once a year. In most cases, when the canceled check from a paid bill has been returned, you can shred the bill.
- However, bills for big purchases -- such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. -- should be kept in an insurance file for proof of their value in the event of loss or damage.
- Length of time to keep: From one year to permanently
- Credit card receipts and statements
- Keep your original receipts until you get your monthly statement; shred the receipts if the two match up.
- Keep the statements for seven years if tax-related expenses are documented.
- Length of time to keep: From 45 days to seven years
- Paycheck stubs
- When you receive your annual W-2 form from your employer, make sure the information on your stubs matches.
- If it does, shred the stubs. If it doesn't, demand a corrected form, known as a W-2c.
- Length of time to keep: One year
- House/condominium records
- Keep all records documenting the purchase price and the cost of all permanent improvements -- such as remodeling, additions and installations.
- Keep records of expenses incurred in selling and buying the property, such as legal fees and your real estate agent's commission, for six years after you sell your home.
Length of time to keep: From six years to permanently
Comments (15)
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Great post, Gregory.
view Seaside's profile
You can also use your shredded documents for packaging material instead of buying packing peanuts and I used mine in my compost heap, where it breaks down quickly and ends up in the garden (don't use any magazines or glossy, colored paper for this, as the inks can be detrimental).
view Motherbear's profile
We cannot recycle shredding in the local recycle pick-up here in Phoenix, but the Humane Society accepts shredding to use for the animals (litter box, etc.) They have a big bin outside to drop off donations of shredding, food, linens or other pet related stuff. That is now our way to recycle rather than throw it away.
view akimbo's profile
A friend told me recently that when the IRS performs an audit, they can go back way more than 7 years. She knows, because she went thru one with an ex-husband, and they did.
view sunspot42's profile
Lucky you, it must be a damm good feeling with a decluttered closed. I plan to start with a new round of decluttering on friday and hope to be as successfull as you!
view nicolezh's profile
I always thought it was 3 years for tax documents. When I moved into my new co-op 2 years back I started afresh decluttering by shredding all my tax stuff from before the 3-year window. Oops.
view Elizabeth II's profile
What kind of cabinet is that in the picture, and what is the material on the doors (the white material with the circles on it)???
view collincook's profile
Yikes !! It looks like a baby is in the top bag......
view gallupgirrl's profile
Elizabeth and sunspot, you are both right: the IRS can do audits within seven years (or more apparently?), but they can only demand documentation for the past three years.
I just did a bunch of this over the weekend and my closit is not nearly decluttered yet, but hey, I can get new papers into my file box.
view whytephoenix's profile
Instead of packaging shredded paper in plastic bags, ask for a couple of paper grocery bags when you shop. The next time you shred, pop the mess in a paper bag and recycle the entire package.
view PrettyKitty's profile
Collincook: Not sure about the cabinet, though it looks vintage to me. The doors, though, are Inhabit Wall Flats, available at designpublic:
http://www.designpublic.com/shop/inhabit/7901
There are several styles so take a look!
view modtramp's profile
collincook: the stereo cabinet was a curbside find that I converted and refinished for last year's January Jumpstart project:
http://www.apartmenttherapy.com/la/jan-jumpstart-2008-news/gregorys-project-the-stereo-cabinet-7-moving-on-041778
view gregory's profile
Excellent advice everyone about how to reuse/recycle shredded paper. Unfortunately, because our place is so small (thus the dire need to rid myself of these old docs I kept so long) we could keep about half a bag of the shredded material at most without having to throw something else out to fit. But I like the idea of donating shredded documents to the local Humane Society and will do that next time (thanks akimbo)
view gregory's profile
Thank you for this. I need to start shredding!
view souk1501's profile
For anyone who lives in San Francisco: I just had to shred lots of documents, so checked the Sunset Scavenger website. They request that I packaged all of the shredded paper in paper bags, sealed them up, and lable "shredded paper" on the bags. Apparently the little pieces of paper clog up the machines used for recycling.
view SF_chickadee's profile