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Industry Wire

Record Retention

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 RecordAmount of Time to Retain
Copies of tax returns as filedForever
Tax and legal correspondenceForever
Audit reportsForever
General ledger and journalsForever
Financial statementsForever
Contracts, leases & real estate recordsForever
Corporate stock records and minutesForever
Bank statements, deposit slips & cancelled checks7 years
Sales records and journals6 years
Other records relating to revenue6 years
Employee expense reports and records relating to travel and entertainment expenses6 years
Paid vendor invoices6 years
Employee payroll expense records6 years
Inventory records6 years
Other records relating to expenses6 years
Depreciation schedules & other capital asset recordsTax life of assist + 3 years
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