Tax season is the ideal time to dig through files and receipts and discard the ones you no longer need to keep. But the trick is knowing what you can throw away. Some experts say you need to keep some forever, but you can toss others after a few years. Before you dig into the files, invest in a crosscut or confetti type shredder to protect against identity theft.

The IRS says you need to keep your tax returns for at least three years. IRS has the right to audit the return three years from the filing or due date, but if you fail to report more than 25 percent of your gross income, the IRS has six years. You can claim a refund up to three years after file date.You'll want to hang on to tax documents for calculating assets and estate, and applying for a home mortgage or equity loan. In some cases, creditors and insurance companies require records that extend beyond the IRS requirement.Supporting documents to save:• Copies of W-2 forms.• 1099 forms reporting interest, dividends, capital gains distributions and other income.• Canceled checks and receipts for charitable donations.• Records showing eligible expenses for health saving accounts and 529 withdrawals (qualified tuition plans).• Thank-you letters from charities and year-end investment statements.• Documents showing IRA and 401(k) contributions, especially the nondeductible contributions, to avoid excess taxes. Don't discard the IRA Forms 8606 until you pull out all of the money from the retirement account(s). Experts encourage individuals to keep tax forms for retirement accounts until seven years after depleting.• Quarterly investment statements until you receive your annual statement, but experts say to keep for three years after the sale.The home records to keep:• All house records as long as you live in it; the purchase price, and what you spent on improvements. After the sale of the home, keep the documents for three years. Save receipts and warranties for major household items, furniture, appliances, and electronics in case you need to return.• If you own property in a home office keep the sale records until the statute of limitations expires.• Insurance policies for the home, apartment, car and anything else. Toss out the old ones, although some experts say to hold on to those for three years.• Paycheck stubs for one year until you can compare the W-2 and annual Social Security statements.• Electric, water and other utility bills for one year unless you have a home office and are filing them as a deduction.• Bank account statements and canceled checks for one year, unless you need them to prove tax deductions, then save for three years.• Credit card receipts for a year unless you need the receipt to support a tax deduction.