While electronic billing and account access can reduce paper clutter, there are still key documents you should keep. Here's a quick guide to managing your paperwork efficiently:

Hold for a Year or Less

These documents don’t need to stick around for long—unless you have a specific reason to keep them.

• Utility/Cable/Phone Bills:
• Toss once verified as correct.

• Exception: Keep if you deduct these costs on your taxes.

• Pay Stubs:

• Discard after reconciling with your W-2 at year’s end.
• Exception: Keep a few months' worth if applying for a mortgage.

Hold for Longer

Certain documents need to be kept for a set period in case of audits or disputes.

• Tax Returns and Supporting Documents:
• Keep at least 7 years.

• The IRS can audit up to 3 years after filing or 6 years if income discrepancies exceed 25%.

• Insurance Policies (Home, Auto, Umbrella):

• Retain for the policy year. Discard the old policy when you get a renewal.
• Life, Disability, Long-Term Care Insurance: Keep while the policy is active.

Hold Indefinitely

These vital documents are worth holding onto forever for legal or personal protection.

• Loan Paperwork:
• Keep all documents while paying off a loan.

• After payoff, retain the payoff statement forever to avoid zombie debt issues.

• Critical Documents to Protect in a Firebox or Safety-Deposit Box:

• Birth certificates.
• Adoption records.
• Death certificates.
• Marriage/divorce papers.
• Military records.
• Wills, powers of attorney, and health care proxies.
• Social Security cards.
• Passports.
• Appraisals for valuables (jewelry, art, etc.).
• Bonus: Keep a yearly-updated videotape or digital record of home contents for insurance claims.

Thoughts on Electronic Documents

If you prefer digital storage:

• Download account statements and store them in a secure location beyond your computer’s hard drive.
• Use cloud storage or an external hard drive for backup.

With this strategy, you’ll stay organized and protect yourself from unnecessary hassles!

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