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Storing Your Tax Records - What Paperwork Should You Keep?

 

You’ve paid this year’s taxes and now all you want to do is forget about those boxes of receipts until next year. We can certainly see your point, but the U.S. Government and the IRS have other ideas.

 

The federal government requires you to keep copies of your tax returns and supporting documents for three years. However, this may not be enough if the IRS believes you have significantly underreported your income (by 25 percent or more), and audits you. They can ask for tax returns going six years back.  If there is any indication of fraud, or you do not file a return, no period of limitation exists. To be safe, use the following guidelines. Contact Mark S. Freedman, CPA, Inc. for any tax or financial support.

Business Documents

Personal Documents

  • Keep for One Year

    • Correspondence with Customers and Vendors
    • Duplicate Deposit Slips
    • Purchase Orders
      (other than Purchasing Department copy)
    • Receiving Sheets
    • Requisitions
    • Stenographer's Notebooks
    • Stockroom Withdrawal Forms
  • Keep for Three Years

    • Employee Personnel Records (after termination)
    • Employment Applications
    • Expired Insurance Policies
    • General Correspondence
    • Internal Audit Reports
    • Internal Reports
    • Petty Cash Vouchers
    • Physical Inventory Tags
    • Savings Bond Registration Records of Employees
    • Time Cards for Hourly Employees
  • Keep for Six Years

    • Accident Reports, Claims
    • Accounts Payable Ledgers and Schedules
    • Accounts Receivable Ledgers and Schedules
    • Bank Statements and Reconciliations
    • Canceled Checks
    • Canceled Stock and Bond Certificates
    • Employment Tax Records
    • Expense Analysis and Expense Distribution
      Schedules
    • Expired Contracts, Leases
    • Expired Option Records
    • Inventories of Products, Materials, Supplies
    • Invoices to Customers
    • Notes Receivable Ledgers, Schedules
    • Payroll Records and Summaries,
      including payment to pensioners
    • Plant Cost Ledgers
    • Purchasing Department Copies of Purchase
      Orders
    • Sales Records
    • Subsidiary Ledgers
    • Time Books
    • Travel and Entertainment Records
    • Vouchers for Payments to Vendors,
      Employees, etc.
    • Voucher Register, Schedules
  • Keep Forever

    Federal guidelines do not require you to keep
    tax records "forever," but in many cases there will
    be other reasons you'll want to retain these
    documents indefinitely.

     

    • Audit Reports from CPAs/Accountants
    • Canceled Checks for Important Payments
      (especially tax payments)
    • Cash Books, Charts of Accounts
    • Contracts, Leases Currently in Effect
    • Corporate Documents
      (incorporation, charter, by-laws, etc.)
    • Documents substantiating fixed asset additions
    • Deeds
    • Depreciation Schedules
    • Financial Statements (year-end)
    • General and Private Ledgers,
      Year End Trial Balances
    • Insurance Records, Current Accident Reports,
      Claims, Policies
    • Investment Trade Confirmations
    • IRS Revenue Agent Reports
    • Journals
    • Legal Records, Correspondence and
      Other Important Matters
    • Minutes Books of Directors and Stockholders
    • Mortgages, Bills of Sale
    • Property Appraisals by Outside Appraisers
    • Property Records
    • Retirement and Pension Records
    • Tax Returns and Worksheets
    • Trademark and Patent Registrations
  • Keep for One Year

    Keep year-end mutual fund and IRA contribution statements. However, once the year-end statement has arrived you no longer have to save monthly and quarterly statements once the year-end statement has arrived.

  • Keep for Three Years

    • Credit Card Statements
    • Medical Bills (in case of insurance disputes)
    • Utility Records
    • Expired Insurance Policies
  • Keep for Six Years

    • Supporting Documents for Tax Returns
    • Accident Reports and Claims
    • Medical Bills (if tax-related)
    • Sales Receipts
    • Wage Garnishments
    • Other Tax-Related Bills
  • Keep Forever

    • CPA Audit Reports
    • Legal Records
    • Important Correspondence
    • Income Tax Returns
    • Income Tax Payment Checks
    • Property Records / Improvement Receipts (or six years after property sold)
    • Investment Trade Confirmations
    • Retirement and Pension Records (Forms 5448, 1099-R and 8606 until all distributions are made from your IRA or other qualified plan)

Mark S. Freedman, CPA Inc.

8949 Reseda Blvd., Suite 123

Northridge CA 91324

mark@msf-cpa.com

© 2017 Mark S. Freedman, CPA Inc. | All rights reserved.