We have a 2-drawer filing cabinet with hanging folders. Only use one drawer for paperwork. That's adequate for our needs. I try to go through it at least once a year to toss and shred.

Here is a link that might be useful: when to toss financial records

I assume you will be shredding what you dispose of...and hope you don't literally mean "throw out", as it throwing out full sheets of paper with personal info:)

Oh yeah, we'll be shredding.

I've never heard of the person who wrote the list in the link above, but I'd bet my life savings that she has never been divorced. If she had been, surely she'd know that her advice to throw away many of those records after 3 years could easily cost someone of modest means $100,000 or more, since you'd no longer be able to prove what is or isn't marital property. In many states, your ex would wind up with half of savings, investments, and stuff that should have been yours.

Absolutely nuts IMO.

I would look to the IRS for guidelines on saving financial information. I would think you could reconstruct individual earnings information in the event of a divorce but would verify that aspect of things. Always best to be prepared for anything.

Lee, which items are you referring to?

Btw, there are plenty of similar lists online.

Here is a link that might be useful: how long to keep financial records

Not that shee is planning on a divorce......! But the division of property will vary by state - it doesn't always matter who paid for what, it may still be split down the middle in many states.

As far as I know, the new IRS guidelines are what natal posted in the first link - based on information from our tax advisor.

Keep anything that paid for anything in your house. Not maintenance, like furnace filters, but stuff that can be considered capital investment, like switchplates, cabinet knobs, as well as big ticket items.

Suero - I'm assuming also things like insulation, drywall etc.? Why am I keeping those? I've heard I should but wasn't getting why. This is to be the forever home but I do realize things sometimes change (I'm referring to moving.)

You use those receipts to document the basis for the capital gain or loss on your home if you should sell.
Of course, you need the receipts for the big ticket items, but don't forget the receipts for the little things.

Suero, I believe the 1997 Taxpayer Relief Act ended the need to keep track of home improvement costs for most homeowners, since it allows you to make a substantial profit ($250-500K) on a home sale without paying capital gains.

I guess it depends on when you bought your house and where you live whether you need to keep detailed records. Even with the decline from the peak in home values, there are still many homes in my area that are more than $500K over their original price, so, if those folks didn't keep records of their improvements, they would have to pay capital gains.