As tax time rolls around yet again this year, it came time for me to evaluate my filing cabinet and documents I keep on hand. If you're like me, you tend to keep anything and everything, just in case.
I literally filled up a filing cabinet in 2007, and once I had done my taxes, I realized only one folder's worth of this data was worth keeping. It was time for a shred party. Here are some guidelines I setup to help me know what to keep and what to
hide from the IRS shred.
First, I organized things into three simple groups.
Do Not Shred
These are things I pulled out and scanned copies of, but did not shred. These are things that should NOT be shredded for any reason, and should go into a safety deposit box in a bank off-site from my personal records. They include:
▪ Marriage license
▪ Mortgage paperwork
▪ Car title
▪ 2007 and 2006 tax returns, along with all documentation that supports them
Scan and Shred
A small list, actually. This is mostly year end statements or final statements that frees me from keeping anything else. Us pack-rats need to keep the clutter somewhere, so why not a digital copy that won't jam up my filing cabinet?
▪ Loan data (payoff notices, year end totals, tax details)
▪ Car payments (payoff notice)
▪ Bank records (year end statements, interest details, credit card contracts, 401k and IRA)
▪ Insurance (policy records)
Slash and Burn
Finally, I'm left with a huge pile of crap: everything I kept but have no need for after the end of 2007. All this stuff went straight to shred city:
▪ Utility bills
▪ Monthly bank statements
▪ Old pay stubs (remember, the year end data is saved with my tax records)
▪ Loan records (since most are paid off, and a payoff notice is on file)
▪ ...Everything else
I've moved a lot of our monthly mail to online only notifications and all of our bills to auto bill or auto bank pay. It's just saving trees and valuable space in our house. Most of this information is needed only in case of something big happening (i.e., last paycheck and utility bill needed for address verification on a new loan), and we're not doing that anytime soon. I realized that we just don't need to keep it.
Here's the best part. I got all that sorted out into a big pile and flipped the shredder on. I've got about half a garbage bag full when all of a sudden, the shredder heats up and just stops working. This was two days ago, and it hasn't shredded another inch since. The thing was brand new! I just bought it the day I needed it... because my old shredder died, too.