Are you still saving piles and piles of financial documents that clutter up your home? Most of us are, but that doesn’t mean you need to. You can get rid of much of that space-hogging mess with the help of your computer and a few simple strategies.

Here’s how to decide when you need to keep paperwork…when to shred it…and when saving digital copies is a viable option…

What to Keep

Tax records. The IRS generally has three years to launch an audit, but that window opens to six years when income is underreported by 25% or more…or seven years when a loss from worthless securities or bad debt is reported.

The availability and acceptance of digital records have changed dramatically in the last several years. The IRS now readily accepts scanned and digital images of receipts, tax forms and other supporting documents. The IRS now even requires many tax returns to be filed electronically.

The prevalence of thermal-print cash register receipts, where the text quickly fades, makes original receipts unreliable backup for the future. (When thermal receipts are exposed to high heat, such as in a warm car trunk or in a box in the attic, fading occurs at an even more rapid rate.) Digital records, including e-mailed receipts, are more stable and likely able to support taxpayer claims in the future.

After three (or up to seven) years, you can delete (or shred) most of the supporting documents, but keep the return itself, plus any W-2s and documents detailing retirement account contributions. Save these until you start receiving Social Security payments and withdrawing money from your retirement plan. They could come in handy if there’s a dispute about your Social Security or retirement plan contributions.

Save utility bills with your tax documents only if you take a home-office deduction using the “Regular” method or treat real estate as rental property. The expense could be tax deductible. Otherwise, you can toss those old utility bills.

See below for tools to make it easy to create and store your records and receipts digitally.

Investment account statements. Keep the annual summary account statement and shred monthly statements after verifying that the annual records each security’s cost basis. (IRS regulations now require brokers to maintain the cost basis records for clients.) Unfortunately, if you owned securities before the enactment of the rule in 2011 or have transferred holdings between brokers, this information is more likely to be lost, so you may need to keep older records on those. These records can all be stored digitally.

Do keep original stock certificates and savings bonds. And be sure to maintain the Form 5498, IRA Contribution Information, to support IRA contributions and distributions.

Vital life documents. Keep originals of things such as certified copies of birth certificates, death certificates, marriage license and divorce decrees, although it’s a good idea to have digital copies as backup and easily accessible for cases when originals are not required.

Home and other real estate documents. Hold on to these documents a few years longer than you own the property—to support cost basis for the property and avoid legal issues. For example, having maintenance records will help you defend against a lawsuit from the home’s next owner claiming the house had a problem you failed to disclose.

The records to save include mortgage documents signed at closing…federal truth-in-lending disclosure statements…current homeowner’s insurance contracts…title insurance documents…warranty deeds…receipts from major work done on the home…home inspectors reports…any additional paperwork received at closing…and the deed of release when you pay off your mortgage.

In this category, the move toward paperless storage is enormous. But keep originals of anything that is notarized or has an official seal.

Insurance records. Digital copies of policy statements are most commonly available for auto and home policies. Issuers often offer discount incentives to policyholders who move to paperless billing and policy statements. Life insurance, long-term care and other specialty insurance issuers also may provide digital records. The key in maintaining these policy types is ensuring that a digital file includes any updates or policy revisions.

Verify with your home state if a digital copy of an automobile insurance card is sufficient in case of an accident or if stopped by the police. Nearly all states now allow the insured to provide a digital-format proof of insurance.

Car records. Keep receipts (digital is fine) related to auto maintenance and repairs as long as you own the vehicle. These could establish that you have lived up to the terms of the car’s warranty or help you convince a buyer that you’ve taken good care of the car when you sell it.

What to Toss

Sales receipts and ATM slips. It is OK to skip the register receipt as long as you do not need it to support your case. Prime examples of tossing include forgoing a printed receipt from your daily lunch or java purchase.

What about higher-dollar purchases? A good rule of thumb is to ask yourself, How likely and willing am I to follow through on a warranty claim or return? If the answer is unlikely or never, then trash the receipt and move on. A modern alternative to holding paper receipts is to use a smartphone app to snap an image of the receipt before tossing it into the trash. Or choose to have the store e-mail your receipt.

The New Digital Storage Options 

Sign up for digital delivery of investment and retirement account statements rather than having to convert paper to digital format. The typical household all-in-one printer/scanner is fine for scanning the occasional page, but it’s much too cumbersome to use regularly.

If you are just too busy to routinely download or access your digitally delivered account statements or bills, automation tools such as HubDoc or FileThis can take care of the task. A tool I love for converting something from paper to a digital format is the ScanSnap ix500.

If you struggle with converting paperwork or receipts, there are a variety of services dedicated to solving that drudgery, including Shoeboxed, Expensify and Neat. They can assist with getting rid of paper clutter as well as addressing your fear of losing a vital document.

Consumer-friendly tools such as DropBox, Evernote, CamScanner and Adobe Scan let subscribers snap photos, convert them to pdf and quickly upload to cloud storage.

Good cloud storage options include Google Drive, Apple’s iCloud and Amazon.com (Prime members can snap photos to store receipt images, files and other records). These services are free for a set amount of storage, but you can buy up for additional storage.

Smart: Pick one cloud storage tool and stick with it for the entire calendar year. If you want to switch platforms, make the transition at the start of a new year. That way, you only have one storage location per tax year.