My Dad kept every cancelled check he ever wrote. It was a great historical archive. However, that was about it. To lessen the clutter in your home and mitigate your risk of identity theft it is wise to occasionally curate your accumulated financial history. You should hang onto anything that supports a tax deduction for at least three years. this includes invoices, mileage logs (contemporaneously kept of course), cancelled checks or their images, proof of various payments and statements from the many recipients of your heartfelt charity. Remember, due to the limited amount of information that they provide, bank and credit card statements by themselves do not provide support for the deductions you take. Supporting documents relating to your income received should be held on for at least seven years. These can include records pertaining to the purchase of your home, any substantial improvement to it as well as other realty and stock transactions. In other words, anything that can prove your cost in an investment. For that matter the three year items above should be held on for seven years if they pertain to any type of an income property. Good records will make next year's tax return much less painless and may even save you a few buck if you rely on a professional for preparation. It will also serve you well should you ever find yourself involved in an audit. Organized, well documented limit the potential of a "random find". Finally, your tax returns are essential for preparing next year's return and up to three years are often required when seeking a loan. So, try to get in the habit of maintaining good records. But like the janitor who says that if he has one more key he won't be able to find any of them, the same can be said of that shoebox of old checks and statements in your closet. As always, be sure to check with your own tax professional for any special circumstances particular to your own situation.
