Personal Documents and When to Dispose of Them
When you put a piece
of paper in the trash it can be difficult know what happens to it. Since
few people burn trash anymore, it is likely that your trash passes through
several stages on its way to a landfill or incinerator. Every step that
occurs once the trash leaves your control has risk that someone will find
personal information they can use to cause you harm.
One way to safeguard
personal information is to shred it before it goes into the trash. Shredding
devices are available at most office supply stores. You may want to consider
one depending on your level of concern. Shredding services or shredding
events are often offered by financial institutions or community organizations.
Guidelines and Disposal
information and returns
is a general three year statute of limitation for your taxes. This
means the IRS has three years from when you file your return to start
an audit. (There is no limit for fraudulent returns). Therefore, you
need to keep documents that support items on your tax returns for
those three years. Each year you can throw out the three year old
documents, but you should keep copies of tax returns forever.
records and statements
records must be kept to support your tax returns. Documentation of
purchases and sales (either confirmations or brokerage statements
including the information) must be kept for three years past when
you report the sale on your tax return. You may find it helpful to
keep brokerage statements for many years.
Bank statements and canceled checks
people keep every canceled check and others toss most of them. Certainly
you should keep canceled checks that support any tax deductions and
any that you think may come in handy. Otherwise, canceled checks can
take up a lot of space. Bank statements are a bit different. You may
want to keep them for some period (three years or so) so you can document
your payments for important items. Together with your checkbook register,
you would be able to identify when and how much you paid for almost
These documents can include very important information including Social
Security number and financial institution account numbers if you use
direct deposit. You may need to have the last three month's stubs
if you are planning to apply for a loan. Otherwise, you should only
keep the latest stub.
ATM receipts until you have compared them with your bank statement.
Then dispose of them carefully.
Even though there is no requirement to keep these statements, you
may want to save them for some period (a year) in case there is a
dispute, you want to return an item or if you want to be able to analyze
Generally keep receipts until you have compared them to your credit
card statement. However, if the receipt is for something that you
may want to return, keep it longer.
bills and other household receipts
Unless you are claiming household expenses as tax deductions, there
is no need to keep these types of records very long. You can always
use a canceled check to document payment.
safe to toss in trash.
Keep warranties for as long as you own the item or until the warranty
safe to toss in trash.
policies and claims information should be kept for as long as the
policy remains in effect.
mortgages and information on home improvements should be kept for
as long as you own the home plus the three year period for tax purposes.
documents and pictures
This is your personal preference.
anything containing sensitive information and private pictures.
Documents to keep forever include wills, powers of attorney, birth certificates,
marriage documents, divorce or child care orders, trust documents, business
agreements, military records and other such permanent records.
files with personal information
Floppy diskettes and CDs should be shredded, destroyed or made unusable
in some manner. Computer hard drives deserve special attention. Hard drives
may have information on finances, taxes, user names, passwords and other
information that should not fall into the hands of fraudsters. Deleting
files and formatting a hard drive does not permanently remove the files
from the system. Before disposing, recycling or donating a PC, the hard
drive should be removed and physically destroyed.