Organizing your financial records now will make filling out your tax return easier next year. It will also help if your return is audited.
It doesn’t matter what type of record-keeping you choose. You can even use a shoebox!
What does matter is how long you keep certain documents. In general, you need to keep things like tax returns, bills, credit card statements, and cancelled checks for three years. More complicated documents that support stock transactions and your IRA should be kept for at least four years.
If you run a business, make sure you keep all these related documents for a minimum of four years.
Find out more at IRS.gov.