How long should I keep digital or paper documents?
This information is provided as a general guideline only. If you have questions about destroying any tax or accounting records, please feel free to contact our firm.
When it comes to keeping records, there are two kinds of people: Those who save everything – forever. And those who throw it all away or delete at the earliest possible moment (or even before). The same is oftentimes true for businesses and not-for-profit organizations. They save too little or too much, for too long or not long enough.
ACCOUNTING RECORDS – RETENTION PERIOD
Accounts Payable – 7 Years
Accounts Receivable – 7 years
Depreciation Schedules – 7
Years Expense Records (Receipts and invoices) – 7
Years Financial Statements (annual) – Permanent
General Ledger – 7 Years
Inventory Records – 7 Years (Permanent for LIFO System)
Loan Payment Schedules – 7 Years
Purchase Orders (1 copy) – 7 Years
Sales/Revenue Records – 7 Years
BANK RECORDS – RETENTION PERIOD
Bank Reconciliations – 3 Years
Bank Statements – 7 Years
Cancelled Checks – 7 Years (Permanent for real estate purchases)
Electronic Payment Records – 7 Years
CORPORATE RECORDS – RETENTION PERIOD
Board Minutes – Permanent
Bylaws – Permanent
Business Licenses – Permanent
Contracts – Major – Permanent
Contracts – Minor – Life + 4 Years
Insurance Policies – Life + 3 Years (Check with your agent. Liability for prior years can vary.)
Leases/Mortgages – Permanent
Patents/Trademarks – Permanent
Shareholder Records – Permanent
Stock Registers – Permanent
Stock Transactions – Permanent
EMPLOYEE RECORDS – RETENTION PERIOD
Benefit Plans – Permanent
Employee Files (ex‐employees) – 7 Years (or statute of limitations for employee lawsuits)
Employment Applications – 3 Years
Employment Taxes – 7 Years
Payroll Records – 7 Years
Pension/Profit Sharing Plans – Permanent
REAL PROPERTY RECORDS – RETENTION PERIOD
Real Estate Purchases (escrow documents) – Permanent
Construction Records – Permanent
Leasehold Improvements – Permanent
Home Improvement Records – Permanent
Lease Payment Records – Life + 4 Years
TAX RETURNS – RETENTION PERIOD
Federal and State Returns – Permanent
IRS and State Tax Audit Reports – Permanent
Tax Related Correspondence – Permanent