Is your home office starting to look like a paper recycling plant? Or is your computer overrun by files? You aren’t alone. Many of us are paralyzed by the fear of shredding or deleting the wrong document, so we default to keeping everything.
The result is a chaotic filing cabinet or hard drive where important papers — like your will or car title — get lost amid a mountain of decade-old utility bills.
But hoarding paper or electronic documents isn’t just messy, it’s a security risk. A thief can’t steal a document you’ve already destroyed. By following a clear retention schedule, you can protect your identity and reclaim your space.
What to dispose of
1. ATM receipts and deposit slips
Unless you need these for a specific tax deduction, such as if you are self-employed, there is no reason to keep the small slip of paper that comes out of the ATM. Once you have verified the transaction on your banking app or monthly statement, these slips are just clutter.
However, they do contain partial account numbers and balances, so don’t just toss them in the trash. Shred them to keep your banking details private.
2. Unsolicited credit card offers
Pre-approved credit card offers are a goldmine for dumpster-diving identity thieves. If a criminal gets hold of one, they could potentially open an account in your name.
Shred these immediately, including the return envelope. To stop them from arriving in the first place, you can opt out of prescreened offers at OptOutPrescreen.com, an official consumer credit reporting industry website.
3. Paid utility bills
For most people, a utility bill has served its purpose the moment it is paid. If you need to check your usage history, you can usually log into your provider’s website to view past statements.
Exception: If you claim a home office deduction on your taxes, treat these bills as tax support records (see below).
4. Expired warranties and manuals
If you no longer own the item, or if the warranty has expired, the paperwork is useless. Even for active items, you can often find the user manual online in PDF format.
5. Minor sales receipts
You do not need to keep receipts for groceries, clothing or minor household items once you are sure you won’t be returning them.
Exception: Keep receipts for big-ticket items — such as computers, appliances or jewelry — for insurance purposes. It is also wise to keep receipts for major home improvements, as these can help lower your capital gains tax if you eventually sell your home.
6. Old bank statements
The Federal Trade Commission (FTC) generally recommends keeping bank and credit card statements for one year. This gives you enough time to dispute any errors and reconcile your records.
The only reason to keep them longer is if they contain specific transactions related to your taxes, such as charitable donations or business expenses.
What do keep forever
1. Tax returns
While the IRS generally has a three-year statute of limitations on audits, experts recommend keeping your actual tax returns (the 1040 forms) indefinitely.
They serve as a permanent record of your financial history and can be vital if you ever need to prove your income. Since they take up little space, it is best to play it safe and file them permanently.
2. Vital records
These documents define your legal identity and family status. They are difficult, time-consuming and often expensive to replace. Keep the original physical copies in a fireproof safe or a safety deposit box.
- Birth certificates
- Death certificates
- Marriage licenses
- Divorce decrees
- Adoption papers
3. Wills and estate plans
Your will, living will, trusts and power of attorney documents must be kept indefinitely. Your executor or a trusted family member must know exactly where these are located.
If you update your will, make sure to destroy the old version to avoid confusion among your heirs.
4. Tax support documents
While you keep the return forever, the supporting documents (W-2s, 1099s, mileage logs, charitable receipts) generally only need to be kept for as long as the IRS can audit you.
The IRS usually has three years to initiate an audit, but this extends to six years if they suspect you underreported your income by 25% or more. To be safe, many accountants recommend a seven-year retention period for these files.
5. Loan and mortgage documents
Keep all documents related to a loan as long as you are paying it off. Once a mortgage or car loan is paid in full, keep the discharge or payoff statement as long as you own the asset to prove you own it outright.
For your home, keep all records related to the purchase price and the cost of any major improvements. You will need these to calculate your basis and potential tax liability when you eventually sell the property.
6. Deeds and vehicle titles
You must keep the original title and the deed to your home for as long as you own it. These are the ultimate proof of ownership.
If you lose a car title, selling the vehicle becomes a bureaucratic nightmare involving the DMV. Keep these in your safe until you sign them over to a new owner.
7. Active insurance policies
Keep your current policy documents for life, health, auto and home insurance. You need to know exactly what is covered and how to file a claim.
When you renew a policy and receive a new declaration page, you can usually shred the old one — unless there is an open claim pending from that previous period.
The bottom line
The ultimate goal isn’t just a clean desk or computer; it’s the ability to find what you need in an emergency. Once you have disposed of the clutter, organize what remains.
A streamlined filing system saves you time during tax season and spares your loved ones from sorting through piles of junk mail in the future.