Two questions that I get all the time are: What records do I need to keep? How long should I keep them? As with most questions, there is no simple answer. The best response is that it all depends on which records you are reviewing. Here are a few thoughts about different records.

Tax returns should generally be kept forever.

Some experts say that the supportive documents can be discarded after four years, since the IRS generally won’t audit you after three years from your filing date.

However, they can go back six years if you severely underreported your income. Of course, if you fraudulently filed, there is no time limit. The IRS can come after you anytime they think fraud was involved.

Cancelled checks are always a dilemma. Whether you keep paper copies or electronic copies, checks usually can be discarded after one year. Of course, checks that were used for tax deductible items, warranties or insurance reasons should be kept indefinitely.

Home improvement records should be kept until you sell the house. Capital improvements to your house like additions, swimming pools or spas can add to your tax basis and you get credit against any taxable gain when the house is sold. Cosmetic expenses do not count and those receipts can be tossed after one year.

Most normal receipts like utility or phone bills can be tossed after one year. Keep them longer only if you think you might have a dispute.

Credit card and ATM receipts should be kept until you have had a chance to review your monthly statements. If everything checks out, then you may toss them out. Don’t discard them if they apply to warranties or deductible items. It is a good idea to attach the receipt to the warranty for future proof of purchase.

Many investors have several accounts. You should consider keeping all documentation of purchase of stocks, bonds, or mutual funds. It is a good idea to maintain separate folders for each account. You should keep the records for at least seven years after they are sold.

For IRA or retirement accounts, keep the monthly records and check them for errors, then discard them when you receive the year-end summaries.

I bought my first car, a beloved ’56 Chevy, in 1963. Since then I have owned more than a dozen cars. It is a good idea to keep all purchase, warranty and maintenance records until the vehicle is sold. I thoroughly enjoy getting all the records from a prior owner when I purchase a used vehicle. This may also help increase the value at sale.

Of course, there are some records you should keep forever and ever. These would include birth and marriage certificates, current passports, Social Security cards, military and divorce papers.

It is a good idea to have an inventory of home furnishings, stock purchase agreements and current insurance policies.

Insurance agents suggest that a video record helps if you have a major claim like a fire or earthquake.

With the technology of today, you might want to scan your records and keep them in an electronic format.

A safe or a fireproof box would be a good idea for originals. Some folks use a bank safe-deposit box for the important documents and valuables.

One last thought. In this day and age of identity theft, you might consider shredding all your discarded documents. There is a lot of information on your paper records.

You might be surprised to see Social Security, PIN, or account numbers on these forms. Shredding of electronic CDs or disks is in order too.

Shredding protects against the so-called “dumpster divers” getting your info.

Notable quote: “Success comes before work only in the dictionary.” — Anonymous

Mills is a registered investment adviser and certified financial planner. Contact him at 1030 Seminary St., Suite D, Napa, 94559, 254-0155 or suntrm@aol.com.