Tax Documents, Bills, Receipts: What to Save

Preparing for the IRS

I know, it's summertime and nobody wants to think about paperwork, taxes or anything remotely connected with the IRS. I agree, sorting paperwork and paying bills makes me itchy, crabby and hot, and not in the sexual sense. And then there's that never ending dilemma: what should I save and what can I shred? If you subscribe to my husband's policy on paperwork, everything gets clipped on a large brass clip until it gets so full that the nail that holds the clip lets loose from the drywall. Then after a brief hailstorm of naughty words, he releases the clip and papers spew everywhere: bills, receipts, pictures the kids drew two years ago, a recipe for kielbasa, newspaper clipping of obituaries, the title to his motorcycle, envelopes from bills, old church bulletins...you get the picture. And then I, who have a system of sorts, have to wade through the morass.

After 22 years together, I probably won't get him to be more organized, but there may still be hope for you, if you are a paper hoarder. This is a simple straight-forward list of what papers you need to save for budgeting and tax time. At least that will help you with some of the paper tsunami. You're on your own with the rest.

Receipts: (note: don't throw receipts with your credit information in the trash).

-After one week: Get rid of grocery only receipts. Save receipts from all purchases for at least a week. Receipts for grocery items you can shred after a week because you'll no longer be able to return food after a week or so.

-After three months: Save receipts for non-income tax related products for three months. That's about the maximum time most stores will allow you to return an item.

-After one year: Save receipts related to your work, educational expenses, college tuition, hospital bills, medical equipment and prescriptions, eyeglasses, braces, contacts, hearing aids, 'green' home improvements (new windows, new roof, solar hot water heater, energy efficient siding or appliances), Even if you can't necessarily return for refund, these are tax deductible. If you purchased extended warranties, save the receipts longer.