We all know about the adage that spring cleaning is a great time to reset yourself for the year to come. Like spring cleaning your house, there’s something to be said for spring cleaning your finances as well.
Specifically: paperwork. Old bills, old receipts, old tax records. What do you need to keep? What can you throw away? And surprisingly – what should absolutely never, EVER be tossed?
We caught up with CBS News Business Analyst Jill Schlesinger for her take on spring cleaning your financial records. Here’s the full transcript of our conversation with Jill:
WKMG-TV: It’s time for spring cleaning, not your home, your finances. And if we’re talking finances, we’re talking to CBS News Business Analyst Jill Schlesinger. She is here to tell us which files and paperwork we need to keep and what we can toss.
Jill, it’s tax season. How long do we need to keep those old returns?
Jill Schlesinger: Cue the groans here. Six years, and here’s why. The IRS can look back three years in an audit, but if they identify a substantial error, they can tack on another three years.
So, keep the returns, all the supporting documents for six years to be safe. Just confirm with your tax preparer, if you use one, just say, ‘Hey, are you maintaining electronic copies of everything I file?’ That’s a good thing to ask about.
Everything beyond six years: please shred it. Don’t throw it out. Remember, scammers love that information. Shred anything with your confidential information on it.
[WATCH: If it’s March, it’s time to think about your taxes. Yay.]
WKMG-TV: And Jill, what about other paperwork like bank and investment statements, and utility bills?
Jill Schlesinger: I think with utility bills it’s usually 45 days you can get rid of it. I know a lot of people have this information electronically, but if you do get paper statements for investments or banks, I tend to think that after a month or two you probably don’t need it. Most of this information is available online for 12 months.
The one thing I will say is that when you make a purchase for some reason and you might need it for tax purposes, that I’d print out and stick in your tax file. If you or a relative might apply for Medicaid, please know that there are a lot of states out there that are requiring five years’ worth of statements, so don’t be too aggressive on treading those bank and investment statements if you think you’ll be applying for Medicaid.
[WATCH: Are ‘zombie’ mortgages rising again nearly 20 years after the housing crash?]
WKMG-TV: Okay, we’ve talked about cleaning up and tossing some old records and files. What is on the “do not throw away” list?
Jill Schlesinger: Okay, birth and death certificates high up there, social security cards, marriage licenses, divorce decrees, military discharge papers, and estate documents. You really need to keep these. If you’ve got paper versions of any of them, do make digital copies.
And one more category, just know that if you’ve got something that’s related to a home improvement project, maybe a big purchase you made for the house. You want to keep those records on hand until you sell the house or the asset.
WKMG-TV: Jill, great advice. You can see Jill regularly on CBS Mornings and the CBS Evening News. And for more analysis, head on over to JillOnMoney.com.