Record Retention Guide

Federal law requires that you maintain copies of your tax returns and supporting documents for three years.  However, if the IRS believes you have significantly underreported income (by 25% or more), or believes there may be fraud committed, it may go back six years in an audit.

Business Documents To Keep For Three Years

• Employee Personnel Records (after termination)

• Employment Applications

• Expired Insurance Policies

• Internal Audit Reports

• Internal Reports

• Petty Cash Vouchers

• Time Cards For Hourly Employees

Business Documents To Keep For Six Years

• Accident Reports, Claims

• Accounts Payable Ledgers and Schedules

• Accounts Receivable Ledgers and Schedules

• Bank Statements and Reconciliations

• Cancelled Checks

• Employment Tax Records

• Expense Analysis and Expense Distribution Schedules

• Expired Contracts, Leases

• Inventories of Products, Materials, Supplies

• Invoices to Customers

• Notes Receivable Ledgers, Schedules

• Payroll Records and Summaries, including payment to pensioners

• Copies of Purchase Orders

• Sales Records

• Subsidiary Ledgers

• Travel and Entertainment Records

• Vouchers for Payments to Vendors, Employees, etc.

Business Records To Keep 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

• 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

Personal Documents To Keep For One Year

• Bank Statements

• Paycheck Stubs

• Canceled checks

• Monthly and quarterly mutual fund and retirement contribution statements

Personal Documents To Keep For Three Years

• Credit Card Statements

• Medical Bills (in case of insurance disputes) 

• Utility Records

• Expired Insurance Policies 

Personal Documents To Keep For Six Years

• 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

Personal Records To Keep Forever

• CPA Audit Reports

• Legal Records

• Important Correspondence

• Investment Trade Confirmations

• Retirement and Pension Records

Special Circumstances

• Car Records (keep until the car is sold)

• 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)

• Warranties and Instructions (keep for the life of the product)

• Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)