When a flag has served its useful purpose, it should be destroyed, preferably by burning. If you can't burn where you live, you can take your flag to your local VFW and they will dispose of it for you. VFW, Veterans of Foreign Wars of the United States, disposes of the American Flag through a dignified and honorable ceremony.
Uh.. I really don't know what to say about getting rid of an American Flag.... I would suggest putting it into some type of box before throwing it away. Actually, I probably wouldn't throw it away. Just store it away somewhere, and you should be fine. That's what I would do, anyway. I hope this helps!!!!