Q. My husband wants me to save every tax receipt, bank statement, credit card receipt - you get the picture. We have boxes from the 1960's! Isn't there a reasonable length of time to save such documents? Please advise.
Reply: Indeed, this can be tricky. Amy Kincaid, a CPA in Cleveland, advises that you should keep your tax returns and any receipts, cancelled checks, statement and other documents that are utilized to prepare your tax returns for a minimum of six years.
However, she warns that occasionally a situation comes up that requires you to prove payment for an alleged liability that is older than 6 years, so for that reason, keeping your supporting documentation longer, makes sense.
Precisely how long is a personal matter, and is best discussed with a CPA so you can address your specific situation. However, Amy offers these other reasonable rules of thumb to follow:
It is acceptable to dispose of any receipts and cancelled checks that are not utilized to prepare your tax returns such as old ATM receipts, personal credit card bills and utility bills that are not for a rental property.
Since tax returns themselves don't take up much room, keep as long as possible.
Although the current law rarely subjects gain on a personal residence to capital gains tax, tax law may change in the future. Keep the closing statements from the purchase and sale of a home as well as receipts for purchases of big ticket items for a home such as furnace, carpet, roof, plumbing fixtures, etc.
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