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 from the date you filed your original return or 2 years from the date you paid the tax (whichever is later).

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. The IRS also recommends keeping records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.

So, to be safe, we have provided the following guidelines.

Storing Records

Create a Backup Set of Records and Store Them Electronically. Keeping a backup set of records is easier than ever now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet.

And if the original records are provided only on paper, they can be scanned and converted to a digital format. Once the documents are in electronic form, you can download them to a backup storage device, such as an external hard drive.

You might also consider online backup, which is the only way to ensure that data is fully protected. With online backup, files are stored in another region of the country, so that if a hurricane or other natural disaster occurs, documents remain safe.


Caution: Identity theft is a serious threat in today's world, and it is important to take every precaution to avoid it. After it is no longer necessary to retain your tax records, financial statements, or any other documents with your personal information, you should dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.

Business Records

    • Correspondence with Customers and Vendors

    • Duplicate Deposit Slips

    • Purchase Orders (other than Purchasing Department copy)

    • Receiving Sheets

    • Requisitions

    • Stenographer's Notebooks

    • Stockroom Withdrawal Forms

    • 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

    • 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

  • Federal guidelines do not require you to keep tax records "forever." However, 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

    • 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 Records

    • Bank Statements

    • Paycheck Stubs (reconcile with W-2)

    • Canceled checks

    • Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)

    • Medical Bills (in case of insurance disputes)

    • Utility Records

    • Expired Insurance Policies

    • Supporting Documents For Tax Returns

    • Accident Reports and Claims

    • Medical Bills (tax-related)

    • Property Records / Improvement Receipts

    • Sales Receipts

    • Wage Garnishments

    • Other Tax-Related Bills

    • CPA Audit Reports

    • Legal Records

    • Income Tax Returns

    • Income Tax Payment Checks

    • Investment Trade Confirmations

    • Retirement and Pension Record

Special Circumstances

  • Keep until payment is verified on the next bill.

  • Keep until the car is sold/no longer owned.

  • Keep for 3 years after the tax life of the asset.

  • Keep for the life of the product.

  • Keep for the life of the policy.

  • Keep for 6 years beyond the end of the agreement.

  • Keep until reconciled with your W-2(s).

  • Keep for 6 years beyond selling.