What to save, what to throw away

While there is confusion and conflicting information as to how long records should be kept, I suggest the following:
Copies of filed tax returns should be kept forever
Supporting documentation--income records 6 years & deductions 3 years
Unusual transactions--bad debt deductions, excessive medical & contributions & other "out of the ordinary" items should be kept forever
Real estate records--keep for as long as you own the property plus at least 3 years after you dispose of it. Substantiation of your cost basis including improvements, refinancing documents, insurance info & related documents should be kept indefinitely.
Securities--all records of purchases, sales, dates of transactions, dividend reinvestment, stock splits & investment expenses should be kept as long as you own the securities plus at least 3 years after disposal.
IRAs--keep all records until 3 years after the money is withdrawn from the account.
Other--the IRS requires that all records pertaining to carryovers, carrybacks, casualty losses & carry forwards should be maintained for a minimum of 4 years
Business records--general employment records should be kept for a minimum of 4 years. Books of original entry, general ledgers, subsidiary ledgers and journals should be kept indefinitely.

As with any important financial decision, you should consult with your accountant or financial advisor prior to disposing of any records. If you have any questions or would like additional information email me at arthur@theroartgroup.com