How long do I need to keep records on file?
-B.T., Elkins Park, PA
This question typically arises when someone is moving, and they are trying to throw
out all of that accumulated junk. Take it from me, no matter how much you throw out
and how much bigger your new house is, you will still have no place to put anything.
I think it's called the Theory of Junk Expansion. Anyway, if you ask this question
of ten people, you will get ten different answers (usually based on how much room
they have in their house and how many times they have been audited). MY answer is as
follows: 1) tax returns should be kept for at least seven years, 2) paid invoices,
bank statements and other financial records should be kept for at least three years,
3) stock transaction confirmations need to be on file until the sale is reported on
a tax return, and 4) receipts for major purchases, such as a home, auto or appliance
should be kept as long as you own the item. This includes any major repair to the
home. Of course, important documents, such as birth certificates, deeds, wills, etc.,
should be on file forever. And no, I don't have room in my basement for your stuff.
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