Financial records: what to toss & when

Grand Rapids, Mich. (WOTV) - Financial statements, credit card bills, canceled checks and other documents may be helpful for tax purposes or proving a historical transaction or payment. But how long should you keep them?

You should respect your own level of comfort for retaining copies, and we really can’t tell you when it’s completely safe to throw away old documents, but it’s good to know the federal tax rules for requiring you to have receipts and other records to support items on a return are for as long as the IRS can assess you additional tax. In general, the IRS has about six (6) years to assess additional tax if you underreported your income, so many tax advisors recommend holding all tax records for seven (7) years.

Credit Card and account statements Those without tax significance for about one year, but those with tax significance for seven years

Canceled Checks If unrelated to anything claimed on income tax form, or needed to show a bill or debt, you may be able to destroy after verified correct on your statement. Canceled checks that support tax returns, such as charitable contributions or tax payments, should be held for seven years. You’re recommended to keep indefinitely for those related to a home purchase or sale, renovations or other property improvements made. If your home has been sold and another seven years has passed, checks related to renovations or improvements can be destroyed.

Deposit, ATM, credit card and debit receipts Save until the transaction appears on your statement and you’ve verified the information is accurate. You might choose the make an exception for large purchases if kept under warranty or needed to file an insurance claim.

Additional Tips

Many financial institutions no longer send cancelled checks, but copies are often able to view and store via online banking. If you keep records electronically, make sure to back up your data by storing on a CD or flash drive. As old technology is no longer supported, transfer data to new media. You might also research companies that provide backup storage online.

For more information visit the First Community Federal Credit Union Website .