By Jim Donovan
PHILADELPHIA (CBS) — Most Americans can breathe a sigh of relief this week. The federal income tax deadline is behind us and most taxpayers don’t have to worry about number-crunching for another year. But what about all of the paperwork that’s left behind after returns are filed? 3 On Your Side Consumer Reporter Jim Donovan has advice on what to keep and what to toss.
Now that tax season is over it’s tempting to toss all that paperwork too. But not so fast! Some documents may be important down the line. Federal and state income tax returns should be kept for a minimum of seven years. The I.R.S. can audit a return at random up to three years from the date it was filed, and taxpayers will also need supporting documents like W-2 forms, investment purchase statements, and credit card bills to prove deductions if necessary. It’s easy to save returns when they’re filed electronically. those still filing on paper should scan and save all documents to cut down clutter.
What can get tossed?
— Receipts that don’t have anything to do with a tax return
— Pay stubs, since that information is on a W-2
— Monthly investment statements
— Loan documents for items you no longer own
Certain important items should always be kept, preferably under lock-and-key, including —
— Birth and death certificates
— Estate-planning documents and wills
— Marriage licenses and divorce papers,
— Military discharge documents,
— Social Security cards.
For discarded documents, shred them to avoid identity theft. Look locally for free shredding events, which tend to happen during this post-tax season time of year. I post on those events as I learn about them on my Facebook and Twitter feeds so be sure to follow me.
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