Tax Records: What to keep and how long

Just how long you should keep records is partly a matter of judgment and a combination of state and federal statutes of limitations.

Federal returns can be audited for up to three years after filing (six years if underreported income is involved), so all records substantiating tax deductions should be kept at least that long.

Here are recommended retention periods for various records:

 

Records	Retention Period
Cancelled Checks	7 years
Bank deposit slips	7 years
Bank statements	7 years
Tax returns	Permanent
Employment tax returns	7 years
Expense reports	7 years
Entertainment records	7 years
Financial statements	Permanent
Contracts	Permanent
Minutes of meetings	Life of company plus 7 years
Corporate stock records	Permanent
Employee records	Period of employment plus 7 years
Depreciation schedules	Life of business plus 7 years
Real estate records	Permanent
Journal & general ledger	Life of business plus 7 years
Inventory records	7 years
Home improvement records	Ownership period plus 7 years
Investment records	Ownership period plus 7 years

Make a list of your records and documents and then establish a written schedule for disposing of those you need not keep permanently. If you have any questions about any records or recordkeeping requirements, contact our office.