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It is not necessary to save every bill, receipt and statement forever. However, some items do need to be kept longer than others. Consider making your life a little simpler and saving yourself some space, by shredding things as you can instead of doing all of your year’s shredding at one time.

Set up your shredding schedule like this:

  • Get rid of your ATM receipts and bank deposit slips as soon as you match them up with the monthly statement.
  • Toss utility, credit card, phone and cable bills as soon as you receive the next month statement showing acknowledgement of your last payment. But, if you are claiming these expenses on your tax return, you should keep them three years, or six if self-employed.
  • Monthly statements from your bank, or broker and also paystubs can be thrown away once you have received the year end forms and you have confirmed their accuracy.
  • Receipts and documentation for home improvements should be kept for at least three years after you sell your house. You can use these to show buyers what repairs you have done and some may also be eligible deductions on your tax return.
  • Supporting documents to a tax return, such as canceled checks and receipts, can be discarded after three years, or six years if you are self-employed.
  • Records of stock basis and re-invested dividends and capital gain distributions should be kept for as long as you hold the stock. This information offsets the amount you pay in tax on any gain.
  • You should keep copies of your Form 8606 until you withdraw all money from your IRA to be sure you don’t end up overpaying on taxes when you begin to withdraw it.
  • Tax returns should be kept for a minimum of six years, but it can be wise to keep a copy in your files (electronically or paper) forever.

Be sure to shred these documents though, you run the risk of becoming a victim of identity theft if you just put them in your trash. If you are unsure about whether you can throw away a certain document, be on the safe side and call your accountant.