How Long Should You Keep Your Tax and Financial Records?

Business Records to Retain

One Year:

• Customer & vendor correspondence

• Duplicate deposit slips

• Purchase orders

• Receiving sheets

• Requisitions

Three Years:

• Employee records (post-termination)

• Employment applications

• Expired insurance policies

• Internal audit reports

• Petty cash vouchers

Six Years:

• Accounts payable/receivable ledgers

• Bank statements & reconciliations

• Cancelled checks & stock certificates

• Employment tax records

• Payroll records & summaries

• Sales records & invoices

• Travel & entertainment records

Forever:

• Audit reports by CPAs

• Contracts, leases, and corporate documents

• Depreciation schedules & financial statements

• IRS reports & legal correspondence

• Tax returns and worksheets

Personal Records to Retain

One Year:

• Bank statements & paycheck stubs

• Canceled checks

• Mutual fund/retirement statements

Three Years:

• Credit card statements

• Medical bills (for insurance disputes)

Six Years:

• Tax-related supporting documents

• Accident claims & medical bills

Forever:

• Tax returns and payment checks

• Investment trade confirmations

• Legal documents and important correspondence

Special Circumstances

• Car records (until sold)

• Credit card receipts (keep with statements)

• Insurance policies (retain for life of policy)

• Property records (retain until property is sold)

Always consider creating electronic backups of these records, especially for critical documents like tax returns, legal paperwork, and financial statements. This can help ensure security, protection from natural disasters, and easy access when needed. Always securely dispose of outdated records to prevent identity theft.