Shredding Personal Documents and When to Dispose of Them
When you put a piece of paper in the trash, it can be difficult to know what happens to it. Every step that occurs once the trash leaves your control carries risk that someone could find your personal information and exploit that data to cause you financial loss.
One way to safeguard personal information is to shred it before it goes into the trash. Shredding devices are available at most office supply stores, and shredding services or shredding events are often offered by financial institutions or community organizations.
Another helpful approach to managing documents is to scan documents before shredding them. Scanned PDFs can be used as receipts for tax purposes, and having a scanned digital file can make it easier to get a replacement copy of an important paper document.
Having scanned copies of important documents can also be convenient if a fire or natural disaster damages or destroys your paper documents and records.
Item Retention Guidelines and Disposal
|
Tax information and returns |
There is a general three-year statute of limitation for your taxes. This means the IRS has three years from when you file your return to start an audit. (There is no limit for fraudulent returns). Therefore, you should keep documents that support items on your tax returns for at least those three years. Each year you can throw out the three-year old documents, but you should keep copies of tax returns forever. |
Shred |
|
Investment records and statements |
Investment records should be kept to support your tax returns. Documentation of purchases and sales (either confirmations or brokerage statements including the information) should be kept for three years past the date you report the sale on your tax return. You may find it helpful to keep brokerage statements longer than the 3 years. |
Shred |
|
Bank statements |
You may want to keep bank statements for some period (three years or so) so you can document your payments for important items. Together with your account register, you would be able to identify when and how much you paid for almost anything. |
Shred |
|
Canceled checks |
Print and keep images of canceled checks that support any tax deductions and any you think may come in handy. Ask your bank how long digital images are stored online (usually 3 to 6 months), because requesting a copy after that may generate a fee. |
Shred |
|
Paycheck stubs |
These documents can include very important information including Social Security number and financial institution account numbers. You may need to have the last three month's stubs if you are planning to apply for a loan. |
Shred |
|
ATM receipts |
Keep ATM receipts until you have compared them with your bank statement. |
Shred |
|
Credit card statements |
Even though there is no requirement to keep these statements, you may want to save them for some period (a year) in case there is a dispute, if you want to return an item, or if you want to be able to analyze your spending. |
Shred |
|
Credit card receipts |
Generally, keep receipts until you have compared them to your credit card statement. However, if the receipt is for something you may want to return, or something that may relate to a tax return, keep it longer. |
Shred |
|
Utility bills and other household receipts |
Unless you are claiming household expenses as tax deductions, there may not be a need to keep these types of records very long. You can typically use a canceled check to document payment. |
Shred |
|
Warranties |
Keep warranties for as long as you own the item or until the warranty period expires. |
Probably safe to toss in trash |
|
Insurance |
Insurance policies and claims information should be kept for as long as the policy remains in effect. |
Shred |
|
Home financial information |
Deeds, mortgages and information on home improvements should be kept for as long as you own the home, at a minimum the three year period for tax purposes. |
Shred |
|
Personal documents and pictures |
This is your personal preference. |
Shred anything containing sensitive information and private pictures. |
Permanent Files
Documents to keep forever include wills, powers of attorney, birth certificates, marriage documents, divorce or child care orders, trust documents, business agreements, military records, Social Security cards, and other such permanent records.