Record Retention Guide

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Tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects under reported income. It is wise to keep tax records at least seven years after a return is filed. Requirements for records kept electronically are the same as for paper records. Generally, follow these recommended periods for various documents: 

Business Accounting Records

Accounts payable - 7 years

Accounts receivable - 7 years

Audit reports - Permanent

Chart of accounts - Permanent

Depreciation schedules - Permanent

Expense records - 7 years

Financial statements (annual) - Permanent

Fixed asset purchases - Permanent

General ledger - Permanent

Inventory records - 7 years

Loan payment schedules - 7 years

Purchase orders (1 copy) - 7 years

Sales records - 7 years

Tax returns - Permanent

Bank Records

Bank reconciliations - 2 years

Bank statements - 7 years

Cancelled checks - 7 years

Electronic payment records

Corporate Records

Board minutes - Permanent

Bylaws - Permanent

Business licenses - Permanent

Contracts - major - Permanent

Contracts - minor - Life + 4 years

Insurance policies - Life + 3 years

Leases/mortgages - Permanent

Patents/trademarks - Permanent

Shareholder records - Permanent

Stock registers - Permanent

Stock transactions - Permanent

Real Property Records

Construction records - Permanent

Leasehold improvements - Permanent

Lease payment records - Life + 4 years

Real estate purchases - Permanent

Employee Records

Benefits plans - Permanent

Employee files (ex-employees) - 7 years

Employee applications - 3 years

Employment taxes - 7 years

Payroll records - 7 years

Pension/profit sharing plans - Permanent

Individual Records

Tax returns (uncomplicated) - 7 years

Tax returns (all others) - Permanent

W-2s - 7 years

1099s - 7 years

Cancelled checks supporting tax deductions - 7 years

Bank deposit slips - 7 years

Bank statements - 7 years

Charitable contribution documentation - 7 years

Credit Card statements - 7 years

Receipts & logs pertaining to tax returns - 7 years

Investment purchase and sales slip - Ownership period + 7 years

Dividend reinvestment records - Ownership period + 7 years

Year-end brokerage statements - Ownership period + 7 years

Mutual fund annual statements - Ownership period + 7 years

Investment property purchase documents - Ownership period + 7 years

Home purchase documents - Ownership period + 7 years

Home improvement receipts and cancelled checks  - Ownership period + 7 years

Home repair receipts and cancelled checks - Warranty period for item

Retirement plan annual reports - Permanent

IRA annual reports - Permanent

IRA nondeductible contributions Form 8608 - Permanent

Insurance policies - Life of policy + 3 years

Divorce documents - Permanent

Loans - Term of loan + 7 years

Estate planning documents - Permanent