shredded paperIt’s almost time for spring cleaning.

While you’re thinking about what needs cleaning in your house, don’t forget to declutter by getting rid of unnecessary documents.

When contemplating this thankless task, a major hang-up, besides time, is determining what you can safely toss. Or better yet, shred, so the documents don’t fall into the wrong hands.

Here are 10 things you can safely shred:

1. Pay stubs. After receiving your W-2 form for the year, you can reconcile the IRS document with your own pay records. Once you’ve done that go ahead and get rid of the pay stubs.

2. Tax returns. Keep your old tax returns, receipts or cancelled checks verifying tax-deductible expenses and other supporting documents at least until the statute of limitations expires, which is usually three years. The federal government typically reserves the right to audit taxpayer returns for three years after filing.

One exception to this rule is receipts for your home that could come in handy when you sell the residence. Proof of the money that you spent on improvements can reduce potential capital gains taxes.

Once you sell the house, hold onto these records for another three years.

You’ll also want to keep records of your investments until at least three years after you sell the assets.

3. Bank statements. Once you’ve checked the monthly bank statement for mistakes and irregularities go ahead and shred it.

4. Investment statements. Once your financial firm(s) sends you the yearly statement for each of your investment accounts, you can shred the quarterly and monthly statements.

5. Credit card statements. Only hang onto statements that you will need for your income tax returns and proof of purchase.

6. Credit reports. Get rid of credit reports that could provide a handy road map to your credit history for identity thieves.

7. Convenience checks. There is no reason to hold onto blank checks that credit card companies send unsolicited to customers.

8. Expired insurance policies. There is no need to keep expired insurance policies for your vehicles, apartment and home. The same advice applies to health and life insurance coverage.

9. Old travel documents. Only hold onto trip receipts that you might need for tax purposes.

10. Cancelled and voided checks. If you don’t need these checks for tax purposes, get rid of them.

Reduce your paper documents

Do yourself a favor and consider generating fewer documents in the future!

Banks, credit unions, credit card companies, financial advisors, attorneys and accountants are encouraging their customers to stick with paperless, electronic correspondence. Why have monthly statements and other documents sent to your house when you can view them safely online? Going paperless allows you to bypass the mailbox, which is a weak link when it comes to protecting your privacy.

Some financial advisors, such as Dowling & Yahnke, and tax preparers have gone a step further by creating client portals, which are a secure alternative to e-mail. These portals are secure online storage areas that allow advisors to upload documents, such as tax returns, to an encrypted website that clients can access with a password. The tax preparer or advisor will notify the client by e-mail when information is available on the portal, but sensitive documents will not be emailed.

Learn More

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