Retention Guides BUSINESS DOCUMENTS RETENTION GUIDE PERSONAL DOCUMENTS RETENTION GUIDE Business Documents 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. 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.   Keep For One Year | Keep For Three Years | Keep For Six Years | Keep Permanently | Special Circumstances     Business Documents: Keep For One Year Customers and Vendors Correspondence Duplicate Deposit Slips Purchase Orders Receiving Sheets Requisitions Stenographer’s Notebooks Stockroom Withdrawal Forms   Business Documents: Keep For Three Years Bank Statements and Reconciliation's Employee Personnel Records (after termination) Employment Applications Expired Insurance Policies General Correspondence Internal Audit Reports Internal Reports Petty Cash Vouchers Physical Inventory Tags Employees Savings Bond Registration Records Time Cards For Hourly Employees   [top of page]   Business Documents: Keep For Six Years Accident Reports, Claims Accounts Payable Ledgers and Schedules Accounts Receivable Ledgers and Schedules 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   [top of page]   Business Records: Keep Permanently While federal guidelines do not require you to keep tax records permanently, there may be other reasons 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 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 Patent Registrations   [top of page]   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) 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)   Personal Documents 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. 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.   Keep For One Year | Keep For Three Years | Keep For Six Years | Keep Permanently | Special Circumstances     Personal Documents: Keep For One Year While it's important to keep year-end mutual fund and IRA contribution statements permanently, you don't have to save monthly and quarterly statements once the year-end statement has arrived.     Personal Documents: Keep For Three Years Credit Card Statements Medical Bills (in case of insurance disputes)  Utility Records Expired Insurance Policies    [top of page]   Personal Documents: 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   [top of page]   Personal Records: Keep Permanently While federal guidelines do not require you to keep tax records permanently, there may be other reasons to retain these documents indefinitely. CPA Audit Reports Legal Records Important Correspondence Income Tax Returns Income Tax Payment Checks Investment Trade Confirmations Retirement and Pension Records   [top of page]   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) 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   [top of page]         1220 Kingstown Road, Peace Dale, RI 02879   401-783-1140 phone  206-333-0782 fax   tom@thomasvignalicpa.com