Record Retention Guide
- Home
- Record Retention Guide
Record Retention Guide
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.
| Business Records To Keep… | Personal Records To Keep… |
| 1 Year | 1 Year |
| 3 Years | 3 Years |
| 6 Years | 6 Years |
| Forever | Forever |
| Special Circumstances | |
Schedule a Consultation
(202) 841-9198
Create a Backup Set of Records and Store Them Electronically. Keeping a backup set of records — including, for example, bank statements, tax returns, insurance policies, etc. — is easier than ever now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet.
Even if the original records are provided only on paper, they can be scanned and converted to a digital format. Once the documents are in electronic form, taxpayers can download them to a backup storage device, such as an external hard drive, or burn them onto a CD or DVD (don’t forget to label it).
You might also consider online backup, which is the only way to ensure that data is fully protected. With online backup, files are stored in another region of the country, so that if a hurricane or other natural disaster occurs, documents remain safe.
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 should dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.
- Correspondence with Customers and Vendors
- Duplicate Deposit Slips
- Purchase Orders (other than Purchasing Department copy)
- Receiving Sheets
- Requisitions
- Stenographer’s Notebooks
- Stockroom Withdrawal Forms
- Accident Reports, Claims
- Accounts Payable Ledgers and Schedules
- Accounts Receivable Ledgers and Schedules
- Bank Statements and Reconciliations
- 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
- Bank Statements
- Paycheck Stubs (reconcile with W-2)
- Canceled checks
- Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)
- 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
- 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)
- 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
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
- 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
- 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
- Credit Card Statements
- Medical Bills (in case of insurance disputes)
- Utility Records
- Expired Insurance Policies
- CPA Audit Reports
- Legal Records
- Important Correspondence
- Income Tax Returns
- Income Tax Payment Checks
- Investment Trade Confirmations
- Retirement and Pension Records
About Tia Cantrell, CPA
Tia Cantrell was born in the Republic of Georgia, in the seaside palm tree shaded city of Sokhumi on the Black Sea. She became a refugee at the age of 13. Her entire family was displaced as a result of a punitive post-Soviet war. Tia’s parents stayed back until the very last day and spent the rest of their lives hoping one day they would get to go back to the home they missed so much. Unfortunately, that’s one dream she has not been able to help them realize.
At 16, Tia became an exchange student and came to an American high school, completely mesmerized by the new culture. She went back to Georgia, and 5 years later her American host parents gave her an opportunity of a lifetime to come back to the US and start a new life in the States. That’s one gift that Tia can never fully repay them for. It was priceless to her.
Tia Cantrell entered college not quite sure of the path she would choose. That changed when Dr. Terrell entered her classroom. She was strong, vibrant, extremely competent with a knack to make the most complex topics easily understood. During her class she would tell stories from when she and her husband owned and operated a public accounting firm for 18 years. She shared that they would help clients from all walks of life. That was the spark that ignited the beginning of Tia’s lifelong love of accounting and finances, a critical trait that makes a true difference in delivering quality solutions to her clients to this day.
That lifelong love was also made possible by a handsome Tennessean she met along her journey. Many years later, with two little girls and their share of ups and downs, they are still going strong and Tia is confident that she wouldn’t change a thing.
In Tia’s own words:
As a young mom, and early in my career, I worked in government internal auditing, eventually transitioning to project/program management, leading large-scale financial software implementations, facilitating complex issue resolutions across teams, departments and organizations. (Boy! That’s a mouthful!)
That was all great but I couldn’t live without those numbers (it really is a curse!) so in a parallel path I supported two full-service CPA firms, true giants in their field, David Clampitt, CPA and CJ Babbit, CPA. I was truly fortunate to have had such amazing mentors. These two positions completely influenced my style and the way I approach problem resolution for my own business and individual clients today.
That is why North Bethesda CPA was born: to help me and the employees who share my vision to take a holistic view of your finances and tailor our services to deliver the best value to our clients. Make an appointment with us. You’ll learn for yourself how we can help. Click here to get started.
Get Started Now!
Give Us 2 Minutes, and We'll Give You Financial Peace Of Mind.
Answer a few quick questions, and one of our talented financial analysts will provide you with the next steps towards financial peace of mind.