Records Retention Guidelines

Clients frequently ask us how long to hold on to their tax records. Here is a summary of our recommendations:

Income Tax Returns and W-2s

Hold these indefinitely. You may end up needing to show these to the Social Security Administration if there is a SNAFU involving your Social Security number and identity. Imagine applying for social security and discovering that your records had been accidentally erased!

General Ledger and Stock Records for Corporations / Partnerships

Hold these indefinitely. The entries made at the formation of these entities determine the proper tax treatment when they are liquidated.

Assets purchased

Hold until 4 years past the sale of the asset, including real estate, investments, vehicles, machinery, furniture, computers, collectibles, and office equipment.

Payroll Records

Hold these 8 years if you have employees. Hold Personnel files and pension documents indefinitely.

Appointment Books / Calendars

Hold these indefinitely. No special reason, except that it's fun to reminisce. Hold for at least 4 years for tax purposes.

Bank Statements, Cancelled Checks, Customer Invoices, and
Receipts for Expenses

Hold for 4 years. Why 4 years? The Internal Revenue Service can audit tax returns dating back 3 years from the date of filing, which may have been as late as October 15 of the following year. If you filed before April 15, you may discard your records three years from that April 15. So on April 15, 2009, you may discard records from the year 2005.

The IRS publishes its own guidelines at: http://www.irs.gov/businesses/small/article/0,,id=98513,00.html

Back to Tax Articles


Contact Us Today  and let Renaissance Financial Group help you achieve your goals.