How long do we need to keep certain records and what do we need to keep?
The federal tax laws require taxpayers to maintain books of account or records to support amounts reported on tax returns. The general rule is that such books and records must be kept as long as they may be relevant to a taxpayer’s claim for a tax credit or refund or to an IRS attempt to assess additional tax for the year in question.
The specific rules relating to the length of time such books and records must be kept are quite detailed. Following is a list of recommended retention periods published in one of our financial and tax services that can be used as a general guideline. In some cases, the retention period recommended may be for nontax reasons–for example real estate records should be kept forever for environmental liability exposure reasons.
|Type of Record||Amount of Time to Retain|
|Copies of tax returns as filed||Forever|
|Tax and legal correspondence||Forever|
|General ledger and journals||Forever|
|Contracts, leases & real estate records||Forever|
|Corporate stock records and minutes||Forever|
|Bank statements, deposit slips & cancelled checks||7 years|
|Sales records and journals||6 years|
|Other records relating to revenue||6 years|
|Employee expense reports and records relating to travel and entertainment expenses||6 years|
|Paid vendor invoices||6 years|
|Employee payroll expense records||6 years|
|Inventory records||6 years|
|Other records relating to expenses||6 years|
|Depreciation schedules & other capital asset records||Tax life of assist + 3 years|