HOW LONG RECORDS SHOULD BE KEPT?

Just how long you should keep records is partly a matter of judgment and a combination of state and federal statutes of limitations. Federal returns can be audited for up to three years after filing, (six years if underreported income is involved). So, all records substantiating tax deductions should be kept at least that long.

Here are recommended retention periods for various records:

Financial Items

7 Years

Cancelled or Substitute Checks, Credit Card Receipts, Paid Invoices, Bank Deposit Slips, Bank Statements, Tax Returns, Employment Tax Returns, Expense Records, Financial Statements, Contracts and Meeting Minutes.

Corporate Stock Records

Permanent

Employee Records

Period of Employment plus 7 Years

Depreciation Schedules

Life of Assets plus 7 Years

Real Estate Records

Ownership Period plus 7 Years

Journal & General Ledge

Life of Business plus 7 Years

Inventory Records

7 Years

Investment Records

Ownership Period plus 7 Years

Home Purchase and Improvement Records

Ownership Period plus 7 Years

Note: Computer-Maintained Records are the same as manually kept records.