We have just finished completing our income-tax return, and now we're looking at mounds of monthly mortgage statements and receipts that go back several years. When can we finally throw some of this stuff away?
You should keep copies of your actual income-tax returns forever, in part because lenders might want to see the most recent ones if you apply for a mortgage to purchase a new house or to refinance your current property.
Also permanently keep receipts and canceled checks for any home-improvement projects you might have undertaken: They'll help to show future buyers how much you have invested in making the property nicer, and even could help you to reduce any taxes that might be due on your eventual resale profit.
If you take the home-office deduction, you'll also need to keep copies of old utility bills and the like, in case you're audited.
The good news is that most other types of documents can be thrown away much sooner. Unless it suspects fraud, the Internal Revenue Service generally cannot initiate an audit more than three years after an individual tax return is filed (though the time frame stretches to six years for people who own their own business).
Any documents you decide to toss should be shredded, an IRS representative adds, because old financial records often include personal information that can help a thief who rummages through your garbage can to steal your identity and begin taking out credit in your name.
I am planning to buy a house, so I want to view my credit report first to make sure all of the information on it is accurate. Some time ago, you said consumers are now entitled to one free credit report a year. How can I get my free report?
The best way to get your free report is to order it online from www.annualcreditreport.com, the only Internet site operated by the nation's three largest credit bureaus in cooperation with the federal government.
If you'd rather order the report by phone and have it mailed to you, call annualcreditreport.com toll-free at (877) 322-8228.
Several other groups are offering free reports over the Internet, but many of them then use high-pressure sales tactics to get consumers to sign up for expensive credit-monitoring programs or other services that they just don't need. A few of these firms have even been busted by law-enforcement officials for identity theft.
- David W. Myers is a 20-year veteran of the newspaper and magazine business, having previously covered real estate for the Los Angeles Times and Investor's Business Daily.