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Record Retention Guide:
Roseville CPA Accountant

Storing tax records: How long is long enough?

April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.

Roseville CPA Accountant

Roseville CPA Accountant Caution: Identity theft is a serious threat in today's world, and it is important to take every precaution to avoid it. After it is no longer necessary to retain your tax records, financial statements, or any other documents with your personal information, you must dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.

Business Documents To Keep For One Year

Tax Planning Correspondence with Customers and Vendors
Tax Planning Duplicate Deposit Slips
Tax Planning Purchase Orders (other than Purchasing Department copy)
Tax Planning Receiving Sheets
Tax Planning Requisitions
Tax Planning Stenographer's Notebooks
Tax Planning Stockroom Withdrawal Forms

Business Documents To Keep For Three Years

Tax Planning Bank Statements and Reconciliations
Tax Planning Employee Personnel Records (after termination)
Tax Planning Employment Applications
Tax Planning Expired Insurance Policies
Tax Planning General Correspondence
Tax Planning Internal Audit Reports
Tax Planning Internal Reports
Tax Planning Petty Cash Vouchers
Tax Planning Physical Inventory Tags
Tax Planning Savings Bond Registration Records of Employees
Tax Planning Time Cards For Hourly Employees

Business Documents To Keep For Six Years

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

Business Records To Keep Forever

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

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

Personal Document To Keep For One Year

Tax Planning While it's important to keep year-end mutual fund and IRA contribution statements forever, you don't have to save monthly and quarterly statements once the year-end statement has arrived.

Personal Documents To Keep For Three Years

Tax Planning Credit Card Statements
Tax Planning Medical Bills (in case of insurance disputes)
Tax Planning Utility Records
Tax Planning Expired Insurance Policies

Personal Documents To Keep For Six Years

Tax Planning Supporting Documents For Tax Returns
Tax Planning Accident Reports and Claims
Tax Planning Medical Bills (if tax-related)
Tax Planning Property Records / Improvement Receipts
Tax Planning Sales Receipts
Tax Planning Wage Garnishments
Tax Planning Other Tax-Related Bills

Personal Records To Keep Forever

Tax Planning CPA Audit Reports
Tax Planning Legal Records
Tax Planning Important Correspondence
Tax Planning Income Tax Returns
Tax Planning Income Tax Payment Checks
Tax Planning Investment Trade Confirmations
Tax Planning Retirement and Pension Records

Special Circumstances

Tax Planning Car Records (keep until the car is sold)
Tax Planning Credit Card Receipts (keep until verified on your statement)
Tax Planning Insurance Policies (keep for the life of the policy)
Tax Planning Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
Tax Planning Pay Stubs (keep until reconciled with your W-2)
Tax Planning Property Records / improvement receipts (keep until property sold)
Tax Planning Sales Receipts (keep for life of the warranty)
Tax Planning Stock and Bond Records (keep for 6 years beyond selling)
Tax Planning Warranties and Instructions (keep for the life of the product)
Tax Planning Other Bills (keep until payment is verified on the next bill)
Tax Planning Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)

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CBR A.P.A.C. is a Roseville CPA accounting firm specializing in small to mid-size business tax planning, consulting, and financial statement preparation in both of our Roseville and Cameron Park offices.