To Shred or Not to Shred:What to do with your tax documents?

We're willing to bet you probably didn't really enjoy filing your taxes this year. Even if you're expecting a big return, you were probably not grinning from ear to ear at the thought of rifling through tax forms and W-2s and interest statements. We're sure it was even less fun if you've recently purchased a home or started a business, and you spent hours scratching your head trying to figure out how the heck this affected whether you were getting money back or have to pony up some cash. But even less fun? Getting audited when you're not prepared for it. So now that tax season has officially ended, we wanted to share some useful advice.

After you file your taxes each year, there are certain pieces of paperwork you should keep on-hand for a while. Many people are tempted to shred their documents shortly after - maybe even a year or two after, to make sure paperwork with sensitive financial details aren't left lying around for too long. But in the end, some of us end up tossing away receipts and forms way too soon, while others stockpile paperwork like they're applying to be on an episode of "Hoarders."

Most of you know that if you don't have a shredder at home, we're happy to shred any documents for you; just bring them in. But while we want you to come in and enjoy the therapeutic feeling that washes over you as your old documents transform into ribbons of recyclable paper, we really try to avoid reducing anyone to tears once they realize they destroyed something they actually should have held onto.

Here are some quick guidelines on what you should shred, and what you shouldn't:

1. Don't shred these items (keep them in a safe or secure file cabinet):
• Your will (have a back-up copy filed with your attorney)
• Birth certificates, adoption papers and death certificates
• Marriage licenses, prenuptial agreements and divorce decrees
• Alimony and child-custody agreements
• Passports, military records and citizenship papers
• Power of attorney decrees
• Copies of your IRA, 401(k) and other retirement account participation plans (Keep your beneficiary names and addresses current.)
• Current insurance policies (Home, health, disability and auto)
• Deeds, property titles, mortgages, stock and bond certificates and employment contracts
• W-2 forms (At least until you begin claiming Social Security…then you can shred them.)
• Investment records (Keep as long as you own the investments, plus another seven years.)
2. Shred these after one month:
• Bank statements, unless this is your only record for a tax-related transaction. Otherwise, you should be able to access them online in the future.
• Credit card statements, unless this is your only record for a tax-related transaction.
3. Shred these after one year:
• Retirement plan statements (except Roth IRA statements, which you should keep until you retire to prove you already paid tax on your contributions. Also, because we listed them in the do not shred list above. You are paying attention, right?)
• Paychecks, until you receive your W-2.
• Bills, in case they're needed for tax purposes. Just don't forget to pay them before filing them.
4. Shred these after seven years:
• Tax documents, including state and federal returns and supporting documents like receipts, and real estate closing statements. The IRS may audit you within three years if it suspects errors, and within six years if they believe you underreported your income by at least 25%. If you don't file a return or file a fraudulent one, they can audit you at any time.

When in doubt, ask your financial planner or a banking professional for advice on other items you're not sure should be kept or shredded. Shredding is a great way to minimize the opportunity for identity theft, but repeat this very important reminder out loud: once you shred something, you can't un-shred it.