I usually recommend that people keep everything for six or seven years, and then, after that, you can kind of discard the backups, the receipts, the 1099’s.
The other place where you have to keep records for longer than the normal period would be to support the basis of your assets.
If you buy and sell securities, you never know when that sale is going to occur; you really have to keep information on your cost basis.
If you own a home, you never know when you’re going to sell that home. You’ve got to keep track of what it cost you initially, what improvements you make.
Commonly people discard that information. Then they sell the house (and) they find that they have to pay a capital gains tax on the difference between what they sold for and what the cost basis is.
Laurence Keiser
Stern Keiser Panken & Wohl
Lawyer, CPA, estate planner
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