RECORD RETENTION GUIDE

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Record Retention Guide

Storing tax records: How long is long enough?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the “three-year law” and leads many people to believe they’re safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.

	Business Records to Keep	Personal Records to Keep
1 Year	Correspondence with Customers and Vendors Duplicate Deposit Slips Purchase Orders (other than Purchasing Department copy) Receiving Sheets Requisitions Stenographer’s Notebooks Stockroom Withdrawal Forms	Bank Statements Paycheck Stubs (reconcile with W-2) Canceled checks Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)
3 Years	Employee Personnel Records (after termination) Employment Applications Expired Insurance Policies General Correspondence Internal Audit Reports Internal Reports Petty Cash Vouchers Physical Inventory Tags Savings Bond Registration Records of Employees Time Cards For Hourly Employees	Credit Card Statements Medical Bills (in case of insurance disputes) Utility Records Expired Insurance Policies
6 Years	Accident Reports, Claims Accounts Payable Ledgers and Schedules Accounts Receivable Ledgers and Schedules Bank Statements and Reconciliations Cancelled Checks Cancelled Stock and Bond Certificates Employment Tax Records Expense Analysis and Expense Distribution Schedules Expired Contracts, Leases Expired Option Records Inventories of Products, Materials, Supplies Invoices to Customers Notes Receivable Ledgers, Schedules Payroll Records and Summaries, including payment to pensioners Plant Cost Ledgers Purchasing Department Copies of Purchase Orders Sales Records Subsidiary Ledgers Time Books Travel and Entertainment Records Vouchers for Payments to Vendors, Employees, etc. Voucher Register, Schedules	Supporting Documents For Tax Returns Accident Reports and Claims Medical Bills (if tax-related) Property Records / Improvement Receipts Sales Receipts Wage Garnishments Other Tax-Related Bills
Forever	While federal guidelines do not require you to keep tax records “forever,” in many cases there will be other reasons you’ll want to retain these documents indefinitely. Audit Reports from CPAs/Accountants Cancelled Checks for Important Payments (especially tax payments) Cash Books, Charts of Accounts Contracts, Leases Currently in Effect Corporate Documents (incorporation, charter, by-laws, etc.) Documents substantiating fixed asset additions Deeds Depreciation Schedules Financial Statements (Year End) General and Private Ledgers, Year End Trial Balances Insurance Records, Current Accident Reports, Claims, Policies Investment Trade Confirmations IRS Revenue Agents’ Reports Journals Legal Records, Correspondence and Other Important Matters Minute Books of Directors and Stockholders Mortgages, Bills of Sale Property Appraisals by Outside Appraisers Property Records Retirement and Pension Records Tax Returns and Worksheets Trademark and Patent Registrations	CPA Audit Reports Legal Records Important Correspondence Income Tax Returns Income Tax Payment Checks Investment Trade Confirmations Retirement and Pension Records

Special Circumstances

Car Records (keep until the car is sold)
Credit Card Receipts (keep with your credit card statement)
Insurance Policies (keep for the life of the policy)
Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
Pay Stubs (keep until reconciled with your W-2)
Property Records / improvement receipts (keep until property sold)
Sales Receipts (keep for life of the warranty)
Stock and Bond Records (keep for 6 years beyond selling)
Warranties and Instructions (keep for the life of the product)
Other Bills (keep until payment is verified on the next bill)
Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)

RECORD RETENTION GUIDE

Record Retention Guide

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