Record Retention Guidelines

The rules of recordkeeping are always a hot topic-mainly because they tend to confuse people. Purging files can also be scary, especially when dealing with documents like tax returns and legal paperwork. We understand that it's hard to know when to toss something and when to keep it. To help you in this area, we've complied a 'general-purpose' record retention list that can be used as a guide. Please review each of the five key guidelines.

NOTE: Be sure to consult the IRS website to ensure compliance with all recordkeeping retention rules. Also note, there may be additional requirements from local and state authorities, insurance companies, creditors, etc. Be sure to consult these entities as well before purging any documents.

Guideline #1 - The items that NEVER get tossed  
These are documents that would be hard to replace and you may be asked to provide in the future. For these reasons, it's recommended that you store these "permanent records" in a safe place-perhaps in a fire safe or safe deposit box. These documents include:

  • Income tax returns and payment checks
  • Important correspondence
  • Legal documents
  • Vital records/certificates (birth, death, marriage, divorce, adoption, etc.)
  • Retirement and pension records
  • Investment trade confirmations and statements that indicate buying and selling
  • CPA audit reports
  • Trust documents

Guideline #2: Give business records a permanent file
Businesses are held accountable to a much stricter set of rules than individuals. To complicate matters further, many industries (healthcare, insurance, law, etc.) set their own legal standards, so be sure to ask your professional association for their policies. In addition to the items listed above, you should create permanent files for:

  • Annual financial statements
  • Corporate documents (incorporation, charter, constitution, bylaws, minutes)
  • Stock records
  • Licenses, patents, trademarks, and registration applications
  • Documents substantiating fixed asset additions
  • Purchase receipts

Guideline #3: Maintain tax records for six years
The IRS may go back six years to audit your tax returns for errors or incorrectly claimed deductions, so it's important that you keep all tax-related documents for this length of time, including:

  • Bank records
  • Personnel and payroll records
  • Purchase and sale records
  • Travel and entertainment records
  • Vendor invoices
  • Settled accident claims
  • Mortgages, deeds, leases on sold property
  • Records on sold stocks and bonds

Guideline #4: Keep everyday paperwork for three years
It's rare that anyone is going to want to see an electric bill or credit card statement dating back more than a year. But you may want to maintain the following non-tax-related items for up to three years:

  • Monthly financial statements
  • Credit card statements
  • Utility records
  • Employment applications (for businesses)
  • Medical bills (in case of insurance disputes)

Guideline # 5: Keep certain papers for certain time period
There are always those "anomaly" documents that don't fit into any of the above categories. You should retain these records according to the following guidelines:

  • Car records (keep until car sold)
  • Credit card receipts (keep until reconciled on your credit card statement)
  • ATM and deposit slips (keep until reconciled on your bank statement)
  • Insurance policies (keep for life of policy)
  • Pay stubs (keep until reconciled with your W-2)
  • Property records / builder contracts / improvement receipts (keep until property sold)
  • Sales receipts (keep for life of warranty or life of the item on large purchases)
  • Warranties and instructions (keep for life of product)
  • Other bills (keep until the payment is verified on the next bill)

If you have any questions, please feel free to call our office. We are here to help!

Information referenced from

Client Center

Using Your Client Organizer
How to Review My 1040
Using File Exchange


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