Hello and

welcome to Moneygirls quick and dirty tips for a richer life.

Today's topic, what to keep, what to toss.

Nothing makes me happier than getting rid of things I don't need.

I really don't like to be bogged down by a lot of extra stuff in my life.

But when it comes to your tax and financial records, what do you need to hang on to and for how long?

Here are some guidelines to help you keep what you need for the right length of time.

First off, you'll want to store your records in an organized way in a safe place.

A filing cabinet is an excellent choice.

For more tips on how to organize your tax and financial paperwork check out last week's episode.

When it comes to tax returns, the IRS has up to three years from the date you file to audit your return if it suspects accidental errors.

You also have three years to file an amended return.

But it's actually best to keep your tax records for seven years because the IRS can ask to see them at later

points in special situations.

If, for example, the IRS suspects you've under-reported your income by an amount that's 25% or more of your reported

income, they can ask to see your records up to six years later.

And if you've written off a worthless stock,

the IRS can ask to see your tax return

and supporting documentation up to seven years later.

So keep them for seven years to play it safe.

I've posted a link to IRS publication 552

which states how long the IRS has to audit your return in different situations.

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