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Life & Money With Helaine

November 19, 2018

Dear Helaine: What sort of financial papers and documents do I need to save? I grew up with a parent who saves everything. She has calendars and old Macy’s bills going back 20-plus years saved in boxes. So I never learned what kind of paperwork I actually need to hold on to and what I can shred. Do I need to hold on to every pay stub for the last 10 years? What about invoices for stuff I bought online five years ago? I really want to declutter my life and pare down my filing system, but I don’t know what I need to keep. — DROWNING IN PAPERWORK Dear Drowning in Paperwork: That’s a lot of paperwork — and not, I am guessing, the full extent of what your mother, er, saves. But that’s her decision, not yours. The practical result of this is that you never learned what should be kept or what could be discarded, and in adulthood you find yourself at a loss. So let’s begin at the beginning. Your birth certificate? Keep that forever. The same for your Social Security card, marriage and divorce papers (if this describes you), and the like. If you own a home, you should keep your mortgage paperwork, deed and other documents related to your ownership of the property. Also keep receipts for any home improvements and repairs; there is a chance you will need them when the day comes to sell the home. Then there is the paperwork related to your taxes — everything from your tax return to the pay stubs and other documentation that go along with it. As it turns out, there are different rules for what you need to keep depending on why the IRS is asking for it. For the most part, you can shred relevant documents three years after you file your annual return, but there are cases where the tax authorities can go back six or seven years. And before you trash old files, you need to know the laws where you live, too. There are states where the tax authorities can ask for documentation going back a decade. As for online shopping receipts, there’s no reason to keep them at all, never mind five years. The site you shopped at should keep copies on file. As for stuff bought day-to-day, you can unload the receipt as soon as you can no longer return it (unless it’s a business expense you plan to write off on your taxes). One last thought: If you truly want to reduce clutter, consider online storage. There are apps that can help with this, but most charge a monthly service fee. TO ASK HELAINE a question, email her at askhelaine@gmail.com.

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