Financial Record Retention

How long should you keep various financial records? Here is a guide:

Taxes -- Seven years
The IRS has three years from your filing date to audit your return if it suspects good faith errors, and six years if it thinks you underreported your gross income by 25 percent or more. Using a tax calculator can help prevent errors when filing to prevent any potential audits.

IRA contributions -- Permanently

Retirement/Savings plan statements -- From one year to permanently
Keep the quarterly statements until you receive your annual summary; keep the annual summaries until you retire or close the account.

Bank records -- From one year to permanently
Throw away checks that have no long-term importance, but keep checks related to your taxes, business expenses, and housing and mortgage payments.

Brokerage statements -- Until you sell your securities

Bills -- From one year to permanently
In most cases, when you receive the canceled check, the bill can be tossed. However, you should keep bills for big purchases (e.g., jewelry, appliances, cars, collectibles, etc.) for proof of their value in the event of loss or damage.

Credit card receipts and statements -- From 45 days to seven years
Keep the statements seven years if they document tax-related expenses.

Paycheck stubs -- One year
If your W-2 form matches your stubs, you can toss your stubs.

House/Condominium records and receipts -- From six years to permanently