Federal law Requires You Maintain Copies Of 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% 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 Documents To Keep One Year
Correspondence with Customers and Vendors
Duplicate Deposit Slips
Purchase Orders (other than Purchasing Dept. copy)
Receiving Sheets
Requisitions
Stenographer’s Notebooks
Stockroom Withdrawal Forms
Personal Documents To Keep One Year
While it’s important to keep year-end mutual fund and IRA contribution statements forever, you don’t have to save monthly and quarterly statements once the year-end statement has arrived.
Business Documents To Keep Three 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
Personal Documents To Keep Three Years
Credit Card Statements
Medical Bills (in case of insurance disputes)
Utility Records
Expired Insurance Policies
Business Documents To Keep Six 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, Summaries, Including Payment To Pensioners
Plant Cost Ledgers
Purchasing Dept. Copies of Purchase Orders
Sales Records
Subsidiary Ledgers
Time Books
Travel and Entertainment Records
Vouchers For Payments To Vendors, Employees, Etc…
Voucher Register, Schedules
Personal Documents To Keep Six Years
Supporting Documents For Tax Returns
Accident Reports and Claims
Medical Bills (if tax-related)
Sales Receipts
Wage Garnishments
Other Tax-Related Bills
Business Documents To Keep 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 CPA’s/ 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
Minutes 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 Patient Registrations
Personal Documents To Keep Forever
CPA Audit Reports
Legal Records
Important Correspondence
Income Tax Returns
Income Tax Payment Checks
Property Records / Update Receipts (6 Years Past Sale)
Investment Trade Confirmations
Retirement and Pension Records
Special Circumstances
Car Records (Keep Until The Car Is Sold)
Credit Card Receipts (Keep Until Verified On Your 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)
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)
