To Keep For One (1) Year
- Correspondence with Customers and Vendors
- Purchase Orders (other than Purchasing Department copy)
- Stockroom Withdrawal Forms
To Keep For Three (3) Years
- Employee Personnel Records (after termination)
- Expired Insurance Policies
- Savings Bond Registration Records of Employees
- Time Cards For Hourly Employees
To Keep For Six (6) Years
- Accounts Payable Ledgers and Schedules
- Accounts Receivable Ledgers and Schedules
- Bank Statements and Reconciliations
- Cancelled Stock and Bond Certificates
- Expense Analysis and Expense Distribution Schedules
- Expired Contracts, Leases
- Inventories of Products, Materials, Supplies
- Notes Receivable Ledgers, Schedules
- Payroll Records and Summaries, including payment to pensioners
- Purchasing Department Copies of Purchase Orders
- Travel and Entertainment Records
- Vouchers for Payments to Vendors, Employees, etc.
- Voucher Register, Schedules
Business Records 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 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
- 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
- Property Appraisals by Outside Appraisers
- Retirement and Pension Records
- Tax Returns and Worksheets
- Trademark and Patent Registrations
Personal Documents To Keep For One (1) Year
- Paycheck Stubs (reconcile with W-2)
- Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)
Personal Documents To Keep For Three (3) Years
- Medical Bills (in case of insurance disputes)
- Expired Insurance Policies
Personal Documents To Keep For Six (6) Years
- Supporting Documents For Tax Returns
- Accident Reports and Claims
- Medical Bills (if tax-related)
- Property Records / Improvement Receipts
Personal Records To Keep Forever
- 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)
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.
Virtual Outsourced Accounting & Tax Solutions for Your Business
Shari Francois, CPB, CPS ®
shari@francoisandassoc.com Nampa,ID 83686