Suze Orman's Spring-Cleaning: Overhaul Your Files and Finances

Next, Know What to Keep and for How Long.

• Utility Bills: Hold on to these for one year—just in case there are any billing issues. If you claim a home-office deduction, keep statements for three years because that's how long the IRS generally has to challenge tax returns.
• Pay Stubs: Save one year's worth. Once you receive a year-end W-2 statement, check it against the last pay stub. If it all matches, chuck the backup.
• Bank and Credit Card Statements: Keep for one year, but with this caveat—if you expect to apply for a mortgage, HELOC, or car loan in the near future, hoard two years' worth of bank statements. After being burned by their own no-doc policies prior to the credit crisis, many lenders are now asking for a ton of income verification before granting any loans, especially for the self-employed. If you bank and pay your bills online, you can typically access at least six months of statements at no charge. Save pdfs of them on your hard drive (or print out copies) in case you need the information; you may be slapped with a fee if you have to ask your bank or credit card company to cough them up later.

• You probably receive monthly or quarterly updates, as well as an annual summary. Once you get that annual statement, toss the others.
• If you make any trades during the year, keep a record of each transaction for at least three years.
• For nondeductible contributions to a traditional IRA or conversions to a Roth IRA, save the IRS form 8606 you filed when making the deposits. When you withdraw during retirement, it will be a piece of cake to prove you've already paid the taxes.

• Since the IRS has three years to challenge anything, you must keep three years' worth of returns and supporting documents.
• Remember: If the IRS suspects you haven't reported income, it can challenge returns from the past six years. So if you are self-employed or have multiple income sources, hold on to six years of files to be absolutely safe. (By the way, there is no statute of limitations if you fail to file or if the government suspects you of fraud.)
• To learn more about IRS recordkeeping guidelines, see Publication 552 on their website (IRS.gov).

• Keep the policy statement for any active account, such as auto and homeowner's insurance, as well as the deed to your home and titles to your cars.