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Bank statements, credit card bills, canceled checks and other documents can be useful for tax purposes, as proof of a transaction or payment, or for other reasons. But how long should you keep them?
FDIC Consumer News can't tell you when it's safe to throw away financial documents. One thing to remember, though, is that federal tax rules require you to have receipts and other records that support items on a return for as long as the IRS can assess you additional tax.
In very general terms, because the IRS has about six years to assess additional tax if you under-reported your income by more than 25 percent, many tax advisors recommend holding all tax records for about seven years, building in extra time for any unforeseen delays in processing your return. In addition, the tax period is unlimited if the IRS suspects fraud.
Finally, before tossing away any document that contains a Social Security number, bank account number or other personal information (especially financial information), shred it to avoid becoming a victim of identity theft.
For additional guidance on what records to toss and when, ask your accountant, attorney or another trusted advisor.