SmartMoney Staff explain:
The urge to purge can be powerful, but don’t rush to fire up the shredder. Experts recommend holding on to:
- Bank statements for at least three years.
- Medical records, those related to chronic conditions and major medical procedures should be kept indefinitely.
- Tax returns—plus related paperwork/ supporting documents—for at least seven. (The IRS can audit you up to three years post-filing and has six years if it thinks you failed to report more than 25 percent of your gross income.)
It is also recommended that these documents be scanned, stored and backed-up.