Tax Resource Center From Mower CPA

Comprehensive Record Retention Guide From Mower CPA:

We have compiled a list of the most common tax and financial records that a business or an individual may need to keep and guidelines for how long the records should be retained. The information contained in this site is of a general nature and may not be applicable to you. Please call our office for specific guidance regarding your situation.

Business

Keep one year:

• Bank reconciliations
• Correspondence with customers or vendors
• Duplicate deposit slips
• Purchase orders (except purchasing department copies)
• Receiving sheets
• Requisitions
• Stenographer’s notebooks
• Stockroom withdrawal forms

Keep three years:

• General correspondence
• Employee personnel records (after termination)
• Employment applications
• Expired insurance policies
• Internal audit reports
• Internal reports
• Petty cash vouchers
• Physical inventory tags
• Savings bond registration records of employees

Keep seven years:

• Accident reports and claims
• Accounts payable ledgers and schedules
• Accounts receivable ledgers and schedules
• Cancelled checks
• Expired contracts and leases
• Expense analysis and expense distribution schedules
• Inventories of products, materials, and supplies
• Invoices to customers
• Notes receivable ledgers and schedules
• Expired option records
• Payroll records and summaries, including payments to pensioners
• Plant cost ledgers
• Purchasing department copies of purchase orders
• Sales records
• Cancelled stock and bond certificates
• Subsidiary ledgers
• Time books
• Voucher register and schedules
• Vouchers for payments to vendors, employees, etc.

Keep permanently:

• Audit reports of accountants
• Cash books, charts of accounts
• Cancelled checks for important payments
• Contracts and leases still in effect
• Correspondence on legal and other important matters
• Deeds
• Mortgage and bills of sale
• Depreciation schedules
• Financial statements (end-of-year)
• General ledgers (and end-of-year trial balances)
• Insurance records, current accident reports, claims, policies
• Journals
• Minute books of directors and stockholders
• Property appraisals by outside appraisers
• Property records
• Tax returns and worksheets, revenue agents’ reports, and other documents relating to the determination of income tax liability
• Trademark registrations

Individuals

Keep one year:

While it’s important to keep year-end mutual fund and IRA contribution statements forever, you don’t have to save monthly and quarterly statements once the year-end statement has arrived.

Keep three years:

• Credit card statements
• Medical bills (in case of insurance disputes)
• Utility records
• Expired insurance policies

Keep six years:

• 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

Keep permanently:

• CPA audit reports
• Legal records
• Important correspondence
• Income tax returns
• Income tax payment checks
• Investment trade confirmations
• Retirement and pension records

Special circumstances:

• Car records (keep until the car is sold)
• Credit card receipts (keep until verified on your statement)
• Insurance policies (keep for the life of the policy)
• Mortgages/deeds/leases (keep six 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 the life of the warranty)
• Stock and bond records (keep for six 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 three years after the tax life of the asset)