Record Retention

Record Retention Guidelines

How Long Should You Keep Tax Records?

Business Records:

• 1 Year: Correspondence with customers and vendors, duplicate deposit slips, purchase orders (excluding purchasing department copy), receiving sheets, requisitions, stenographer’s notebooks, stockroom withdrawal forms.
• 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.
• 6 Years: Accident reports, claims, accounts payable ledgers and schedules, accounts receivable ledgers and schedules, bank statements and reconciliations, canceled checks, canceled stock and bond certificates, employment tax records, expense analysis and distribution schedules, expired contracts and leases, expired option records, inventories of products, materials, supplies, invoices to customers, notes receivable ledgers and schedules, payroll records and summaries (including payments 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 and employees, voucher register and schedules.
• Forever: Audit reports from CPAs/accountants, canceled checks for important payments (especially tax payments), cash books, charts of accounts, contracts and leases currently in effect, corporate documents (incorporation, charter, by-laws, etc.), documents substantiating fixed asset additions, deeds, depreciation schedules, year-end financial statements, 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 and correspondence, 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:

• 1 Year: Bank statements, paycheck stubs (reconcile with W-2), canceled checks, monthly and quarterly mutual fund and retirement contribution statements.

Special Circumstances:

• Backup Records: Create a backup set of records and store them electronically. This includes bank statements, tax returns, insurance policies, etc. Even if original records are on paper, they can be scanned and converted to digital format. Store these backups on an external hard drive, CD, DVD, or consider online backup for full protection.
• Identity Theft Prevention: Dispose of records containing personal information by shredding them, not just throwing them away, to avoid identity theft.

Take Action:

• Contact Us: If you need assistance with managing your tax records or have any questions, feel free to reach out to us. We’re here to help!