Storing tax records: How long is long enough?
April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?
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 an indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.
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 must dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.
Record Retention Schedule: Accounting
| Accounts Payable Invoices | 3 years |
| Accounts Payable Ledger | Indefinitely |
| Accounts Receivable Ledgers | 5 years |
| Authorizations for Signatures | Dispose of when superseded |
| Balance Sheets | Indefinitely |
| Bank statements and deposit slips | 3 years |
| Budgets | 3 years |
| Capital Asset Record | 3 years after disposal |
| Cash Receipt Records | 7 years |
| Check Register | Indefinitely |
| Checks, Payroll | 2 years |
| Checks, Voucher | 3 years |
| Cost Accounting Records | 5 years |
| Depreciation Schedules | Indefinitely |
| Employee Withholding | 4 years |
| Expense Reports | 3 years |
| Financial Statements, Periodic | 2 years |
| General ledgers and journals | Indefinitely |
| Payroll Registers | 3 years |
| Petty Cash Records | 3 years |
| P & L Statements | Indefinitely |
| Unrestricted contribution notification letters | Indefinitely |
| Restricted contribution notification letters | 3 years after restriction lapse |
Record Retention Schedule: Corporate
| Annual Reports | Indefinitely |
| Audit Reports | 10 years |
| Audit Work Papers | 3 years |
| Bylaws, charters and minute books | Indefinitely |
| Classified Documents: Inventories, Reports] Receipts | 10 years |
| Forms Used, File Copies | Indefinitely |
| Mortgages, notes, and leases (expired) | 6 years |
| Mortgages, notes, and leases (expired) | 6 years |
| Annuity gift agreements | Indefinitely |
| Checks (taxes, property, and fulfillment of important contracts) | Indefinitely |
| Contracts and agreements | Indefinitely |
| Copyrights and trademark registrations | Indefinitely |
| Deeds and easements | Indefinitely |
| Labor contracts | Indefinitely |
| Retirement and pension records | Indefinitely |
| Tax returns | Indefinitely |
Record Retention Schedule: Correspondence
| General | 2 years |
| Legal and tax | Indefinitely |
| License | Indefinitely |
| Informal | Only as needed |
| Education | |
| CPE Certificates | 6 years |
| Course Material | 6 years |
| Insurance | |
| Policies (all types – expired) | 3 years |
| Accident Reports | 6 years |
| Employees, Insurance Records | 11 years after termination |
| Fire inspection reports | 6 years |
| Group disability records | 8 years |
| Safety reports | 8 years |
| Claims (after settlement) | 10 years |
Record Retention Schedule: Personnel
| Accident Reports, Injury Claims, Settlements | 30 years after settlement |
| Applications, Changes & Terminations | 5 years |
| Attendance Records | 5 years |
| Contracts (expired) | 3 years |
| Daily time allocation reports | 2 years |
| Disability and sick-benefits records | 3 years following last payout |
| Employee Contracts | 6 years after termination |
| Garnishments | 5 years |
| Job Descriptions | 2 years or when superseded |
| 2 years or when superseded | 3 years |
| Payroll (time sheets) | 3 years |
| Personnel applications (non-hire) | 3 years |
Record Retention Schedule: Purchasing and Sales
| Purchase orders | 3 years |
| Requisitions | 3 years |
| Sales contracts | 3 years |
| Sales invoices | 3 years |
| Bills of lading | 2 years |
| Shipping and receiving reports | 2 years |