Worried about an audit from the IRS? Have a stack of old credit card bills and bank statements cluttering your desk? Well, here are some great tips for how long to keep important financial documents:

• Tax returns and proof of filing: Forever – in case you are audited.
• Documents Supporting Tax Returns (W-2, 1099, receipts to prove deductions, etc.): Six years. The IRS has up to three years from when you file to look for errors on your return and up to six years to audit you if it suspects you under reported income by 25 percent. (There’s no limit if fraud is involved.)
• Receipts: Until the warranty expires, or for as long as you need them for tax purposes.
• Securities Statements (stocks, bonds, mutual funds, etc.): For 6 years after you sell them; to prove a profit or loss for tax purposes
• Medical Bills: 1 yr, unless deducting for taxes, then 6 years.
• Pay Stubs: Until your W-2 arrives; (Be sure to double check it for accuracy on a regular basis!)
• 401k and IRA Statements: Until your year end statement arrives. Keep your year end statements for at least 6 years for tax reasons.
• Bank Statements: 1 year to confirm 1099.
• Utility Bills: 1 year to track usage, assist with budgeting. If you claimed a home office on your taxes, keep your records for six years.
• Credit Card Statements: 1 month for most, so you can reconcile your purchases. Keep them for longer if needed for tax reasons.

This is great advice to simplify book keeping and getting rid of clutter! It’s much easier to do if you take care of things as they come in instead of trying to do a year’s worth of book keeping in one sitting. So take the 15 minutes a week and get organized!

Don’t forget to shred any documents that have important personal or financial information before throwing them out! Many of these important documents contain all the information identity thieves need to steal your identity and ruin your life.

Source: CNN Money – how long you should keep important documents.