BUSINESS

Accounting Records Retention Period

Accounts payable¼¼¼¼..¼¼..¼¼¼.7 years

Accounts receivable¼¼¼¼¼¼¼...¼..7 years

Audit reports¼¼¼¼¼¼¼¼¼¼..Permanent

Chart of accounts¼¼¼¼¼¼¼.¼..Permanent

Depreciation schedules¼¼¼¼¼¼..Permanent

Expense records¼¼¼¼¼¼¼¼¼¼...7 years

Financial statements (annual)¼¼¼....Permanent

Fixed asset purchases¼¼¼¼¼¼.....Permanent

General ledger¼¼¼¼¼¼¼¼¼....Permanent

Inventory records¼¼¼¼¼¼..¼¼¼.7 years¹

Loan payment schedules¼¼¼¼¼¼¼..7 years

Purchase orders (1 copy)¼¼¼¼¼...¼..7 years

Sales records¼¼¼¼¼¼¼¼¼¼¼¼7 years

Tax returns¼¼¼¼¼¼¼¼¼¼.¼Permanent

Bank Records Retention Period

Bank reconciliations¼¼¼¼¼¼¼¼¼2 years

Bank statements¼¼¼¼¼¼¼¼¼¼...7 years

Cancelled checks¼¼¼¼¼¼¼¼¼....7 years²

Electronic payment records¼¼¼¼¼¼.7 years

Corporate Records Retention Period

Board minutes¼¼¼¼¼¼¼¼¼....Permanent

Bylaws¼¼¼¼¼¼¼¼¼¼¼..¼.Permanent

Business licenses¼¼¼¼¼¼...¼¼.Permanent

Contracts—major¼¼¼¼¼¼¼...¼Permanent

Contracts—minor¼¼¼¼¼.¼¼Life + 4 years

Insurance policies¼¼¼¼¼¼....Life + 3 years³

Leases/mortgages¼¼¼¼¼¼..¼¼.Permanent

Patents/trademarks¼¼¼¼¼.............Permanent

Shareholder records¼¼¼¼¼.¼¼. Permanent

Stock registers¼¼¼¼¼¼¼¼¼....Permanent

Stock transactions¼¼¼¼¼¼¼¼. Permanent

Employee Records Retention Period

Benefit plans¼¼¼¼¼¼¼¼¼¼..Permanent

Employee files (ex-employees)¼¼......¼7 years⁴

Employment applications¼¼¼¼¼¼....3 years

Employment taxes¼¼¼¼¼¼¼¼...¼7 years

Payroll records¼¼¼¼¼¼¼¼¼¼.....7 years

Pension/profit sharing plans¼¼¼¼...Permanent

Real Property Records Retention Period

Construction records¼¼¼¼¼¼.¼.Permanent

Leasehold improvements¼¼¼¼...¼Permanent

Lease payment records¼¼¼¼.....Life + 4 years

Real estate purchases¼¼¼¼¼¼.¼Permanent

¹Permanent for LIFO system.

²Permanent for real estate purchases.

³Check with your agent. Liability for prior years can vary.

⁴Or statute of limitations for employee lawsuits.

Tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects underreported 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:

Individual Records Retention Period

Tax returns (uncomplicated)¼¼.¼¼¼7 years

Tax returns (all others)¼¼¼¼¼....Permanent

W-2s¼¼¼¼¼¼¼¼¼¼¼¼¼¼.7 years

1099s¼¼¼¼¼¼¼¼¼¼¼¼¼¼.7 years

Cancelled checks supporting

tax deductions¼¼¼...¼¼¼¼¼...7 years

Bank deposit slips¼¼¼¼...¼¼¼¼..7 years

Bank statements¼¼¼¼¼¼¼...¼¼.7 years

Charitable contribution

documentation¼¼¼¼¼¼¼...¼..7 years

Credit card statements¼¼.¼¼¼...¼..7 years

Receipts, diaries, logs

pertaining to tax return¼¼¼¼..¼..7 years

Investment purchase and sales

slip¼¼¼¼..¼Ownership period + 7 years

Dividend reinvestment

Records¼¼¼...Ownership period + 7 years

Year-end brokerage

statements¼¼...Ownership period + 7 years

Mutual fund annual

statements¼.......Ownership period + 7 years

Investment property purchase

documents¼.¼..Ownership period + 7 years

Home purchase

documents¼¼...Ownership period + 7 years

Home improvement receipts and cancelled

checks...¼¼¼..Ownership period + 7 years

Home repair receipts and cancelled

checks¼¼¼¼¼..Warranty period for item

Retirement plan annual reports¼.¼..Permanent

IRA annual reports¼¼¼¼¼¼.¼.Permanent

IRA nondeductible contributions

Form 8606¼¼¼¼¼¼¼¼..¼Permanent

Insurance policies¼¼.Life of policy + 3 years¹

Divorce documents¼¼¼¼¼¼¼.Permanent

Loans¼¼¼¼¼¼.¼..Term of loan + 7 years

Estate planning documents¼¼¼¼.Permanent

¹ Check with your agent. Liability for prior years can vary.