Tip of the week...
When to toss old tax records
■ Income taxes: If your filing cabinet is bursting with old W-2 statements and 1040 forms, remember that the IRS has only three years to audit any return—unless you’ve seriously underreported income. A number of states have slightly bigger windows—but not more than five years.
■ Stocks and mutu al funds: You’ll need records on stock and other securities transactions until three years past the day you sell. The IRS might otherwise assume you paid zero to purchase them. But if your brokerage provides the details in each year-end statement, those are all you need.
■ Real-estate records: Keep purchase information and receipts for upgrades and renovations for as long as you own a property.
■ Medical receipts: Most people shouldn’t bother keeping them for this reason: You can’t deduct medical expenses totaling less than 10 percent of adjusted gross income. Source: Martha Stewart Living