What Financial Documents Can You Toss After Tax Season?

Pile of documents

A Simple Guide to What to Keep and What to Shred

Another tax season is behind us, and it’s the perfect time to declutter. One of the most common questions I hear from clients every spring is: "Which financial documents can I throw away, and which should I keep?"

It’s a great question and an important one. Holding onto documents longer than needed creates unnecessary clutter. Discarding them too soon could cause problems if you ever face an audit, need to prove a payment, or verify information.

Let’s walk through some simple guidelines to help you confidently sort your files.

Tax Documents

Tax documents include anything that supports what you reported on your return:

• Filed tax returns

• W-2s, 1099s, 1098s, K-1s

• Receipts for deductions

• Bank or credit card statements related to tax items

• Donation letters, mileage logs, and medical bills (if deducted)

• Property tax and mortgage interest statements

• Business expense records and mileage logs

• Business asset depreciation records

  
  

✅ General Rule: Keep for 3–6 Years

Keep for at least 3 years after the filing date (or the due date, whichever is later). But if you’re self-employed or have business income, you should keep your tax records for at least 6 years.

According to the IRS guideline:

• The IRS generally has three years to audit your return or for you to amend it.

• The audit window extends to six years if you underreport income by more than 25% (which can more easily happen with self-employment income).

• There's no time limit if you filed a fraudulent return or didn’t file at all.

Other Document Guidelines

✅ Keep for 1 Year or Less

• Bank and credit card statements (if not tied to taxes)

• Utility bills

• Insurance statements (if no claims)

• Pay stubs (until matched with W-2)

  
  

✅ Keep for 3 Years

• Receipts for charitable donations or medical expenses (if not deducted)

• Retirement account contribution confirmations

  
  

✅ Keep for 6–7 Years

• End-of-year investment statements

• Mortgages and leases

• Records of sold investments (until 6 years after property sale)

• Home improvement receipts (until 6 years after property sale)

  
  

✅ Keep Indefinitely

• Records of large purchases or sales (e.g., real estate, business, investments)

• Legal documents: wills, divorce decrees, powers of attorney

• Retirement account basis tracking (IRA/401(k))

• Satisfaction of mortgage

• CPA audit reports or formal reviews

• Personal or family medical history

✅ Can I Go Paperless?

Yes! The IRS allows digital records, as long as they are:

• Clear and readable

• Complete: don't forget to scan the back page!

• Easy to access when needed

Scanning and organizing your records can reduce paper clutter and simplify future filing. Don't forget to securely back up your data!

✅ What to Toss (Shred First!)

🗑️ You can safely shred:

• Expired insurance policies (after claims are resolved)

• ATM receipts (after reconciling)

• Monthly bills (once paid and recorded)

• Junk mail with personal info

In A Summary

Not sure where to start? Here’s a simple rule of thumb:

• If it supports a tax return or proves ownership, keep it longer

• If it’s already documented elsewhere (e.g., in your online account), you might not need the paper copy

• If in doubt, keep it and ask a professional

Want Help Sorting It All Out?

Decluttering your paperwork can feel like a full-time job. At SDS Smart Daily Services, we help individuals and business owners stay organized and secure.

Download our free checklist:👉Document Retention PDF

Or schedule a free consultation to see how we can help you bring order to your financial life.