How Long Should You Keep your Records?

The Internal Revenue Code at Section 6001-1(e) supplies the general rule that books and records must be kept as long as the information may be material in the administration of the income tax laws. For practical purposes, this means that books and records must be kept as long as there is a possibility that a taxpayer could file an amended return or claim for refund, or the Internal Revenue Service could audit the return or assess additional tax.

The ability of the IRS to audit a return is based on various statutes of limitation. A grossly oversimplified version of the statue of limitation rules would include:

Generally, the IRS has three years from the date you filed your return to assess any additional taxes you owe.
However, if you did not report all of your income and it is more than 25% of the gross income you reported on your return, the IRS has 6 years from the filing date of the return to assess additional taxes.
You have 3 years from the date you filed your return or two years from the date you paid the tax, whichever is later to file a claim for credit or refund. If you filed your return prior to the due date, it is considered filed on the due date. For example, if you filed your individual income tax return on March 10, the filed date for the statute is April 15.
Additionally, if no return is filed or the return is false or fraudulent or if there is a willful attempt to evade tax, there is no limitation period on the assessment of additional taxes.

There may be other types of records you may need to maintain depending on the nature of your business, such as: advertising, manufacturing, sales and marketing and transportation and shipping. Clearly, the policies and procedures that you devise for your organization may require specific input.

This page was prepared to give you general guidelines for determining how long to maintain your important records. We will be happy to provide you further information.

Accounting and Fiscal
Type of Document	Years	Type of Document	Years
Accounts payable ledgers	P^{^[1]}	Checks paid and cancelled	9
Accounts receivable ledgers	10	Checks payroll	7
Balance sheets	5	Donations	7
Bank deposit records	6	Expense reports employees	5
Bank reconciliation papers and statements	8	Financial statements, certified & periodic	P^{^[1]}
Bills collectible	7	Fixed capital records	P^{^[1]}
Bonds sales or transfers	15	General journal, ledger & supporting papers	P^{^[1]}
Bonds registered	P^{^[1]}	Payroll tax returns	4^{^[2]}
Building permits	20	Inventory records	3
Capital stock sales, certificates & ledgers	P^{^[1]}	Invoices to customers	7
Cash books	25	Invoices from sellers (vendors)	7
Cash receipts & disbursement records	10	Payroll register	7
Cash sales slips	3	Petty cash records	3
Charge slips	10	Profit and loss statements	P^{^[1]}
Check records	7	Buy/sell stock, bonds & mutual funds ^{^[3]}	4^{^[4]}
Check register, dividend, expense	10
Corporate
Annual reports	P^{^[1]}	Easements	P^{^[1]}
Capital stock certificates and stock ledger	P^{^[1]}	Election ballots	20
Charters, constitution, bylaws and amendments	P^{^[1]}	Election records	10
Contracts employee (years after termination)	P^{^[1]}	General cashbooks (treasurer and auditor)	25
Contracts government & labor unions (yrs after termination	P^{^[1]}	Incorporation records & certificates	P^{^[1]}
Contracts vendor (years after termination)	10	Licenses & permits to do business (fed, state & local)	P^{^[1]}
Dividend checks	10	Retirement plan contributions (after assets have been withdrawn)	4
Dividend register	P^{^[1]}	Stock, stock transfer & stockholder records	P^{^[1]}
Insurance
Accident reports	11	Claims group life and hospital	4
Appraisals	P^{^[1]}	Claims workmen’s compensation	10
Claims automobile	10	Expired policies all types (after expiration)	3
Legal
Affidavits	10	Copyrights	P^{^[1]}
Claims & litigation of torts & breach of conduct	P^{^[1]}	Mortgages	5
Personal Property
Accident reports, injury claims & settlements	11	Injury frequency charts	10
Applications, changes, terminations	3	Insurance records (group & employee)	6
Attendance and time sheet records	6	Medical folders employee	5
Disability & sick benefits records	8	Payroll records after termination	P^{^[1]}
Earnings records	P^{^[1]}	Pension plan applications, claims & correspondence	P^{^[1]}
Employee service records	P^{^[1]}	Salary and rate changes	10
Employee contracts	P^{^[1]}	Withholding exemption certificates (after termination)	8
File for individual employee	3	Workmen’s compensation reports	30
Garnishments	7
Property
Appraisals	P^{^[1]}	Maintenance and repair buildings	10
Damage reports	7	Maintenance and repair of machinery	5
Deeds and titles	P^{^[1]}	Equipment records & historical folders	P^{^[1]}
Depreciation schedules	3	Sales	7
Inventory records	16	Taxes	P^{^[1]}
Leases	6	Water rights	P^{^[1]}
Taxation
Annuity or deferred payment plan	P^{^[1]}	Invoices to customers & from sellers (vendors)	7
Correspondence	20	Inventory reports	16
Depreciation schedules^{^[5]}	3	Real estate	15
Dividend register	P^{^[1]}	Sales & use tax records	P^{^[1]}
Employee withholding certificates	8	Social Security	P^{^[1]}
Exemption status	P^{^[1]}	Tax bill statements	P^{^[1]}
Excise reports	5	Tax returns and working papers	P^{^[1]}

[1] Permanent

[2] Retain for at least 4 years and preferably 7 if space is not critical. Once the period has elapsed, the supporting documents may be discarded, but the returns and W-2s themselves should be retained indefinitely.

[3] (also record of dividends, splits & reinvested dividends)

[4] Retain for four years after the asset is sold.

[5] For any rental real estate or depreciable business property you own, keep records of the property’s cost, date acquired, and schedule of depreciation claimed in previous years. If the property is sold, keep the records for four years after the sale.

Record Retention

How Long Should You Keep your Records?

Lafayette

Abbeville

Eunice

Morgan City

Thibodaux

Ville Platte