Information is powerful.
I teach various community information management classes, but the one that’s most requested is Paper Clutter Control. It’s a big subject but the core questions are always what to keep, what’s OK to toss and what should be shredded.
The underlying question, the meta question, is “Promise me if I discard it I’ll never need it?”
No one can guarantee you’ll never need a certain piece of information. But we can make good predictions based on experience and, yes, IRS rules.
Generally speaking, hold any supporting documentation for taxable income and expenses for at least 7-10 years. Review this IRS page for small businesses: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records
Here’s their page for personal use: https://www.irs.gov/taxtopics/tc305
But, for every rule there is an exception and there are lots of other reasons to hold onto paperwork.
Here’s the way I think of it: What’s the point you want to prove?
Basically, it’s who you were and are. What you owned and own. What you owe, and most importantly, what they owe you.
What needs to be shredded? Some say anything with any personal information on it. I say anything with personally identifying information beyond your name and address. But if it makes you feel better to shred just the portion of mail with your name on it, go for it. I warn you, though, many people have boxes and bags of “shred” papers that gather dust and offer silent recrimination of yet another undone task.
In January, some of you took my challenge to get their financial paperwork in order. How are you doing with that? Lost interest? Need a hand? Contact me about your paperwork and records needs.
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