Retention Guide
How long should you keep tax returns, business records, and personal financial documents?
Storing tax records: how long is long enough?
Federal law generally requires you to keep copies of your tax returns and supporting documents for three years. This is sometimes called the “three-year law” and leads many taxpayers to believe they are safe discarding everything after that point.
In reality, the rules are more nuanced. If the IRS believes you significantly underreported income (by 25 percent or more), it can usually look back up to six years. If there is any indication of fraud, or you never file a required return, no statute of limitations applies. To be conservative, use the practical guidelines below for the most common record types.
Create a secure backup set of records
Many financial institutions now provide electronic copies of statements, tax documents, and policies. Even if your original records are on paper, you can scan them and store digital copies.
- Download e-statements and tax forms to a secure folder.
- Back up files to an external hard drive or encrypted USB drive.
- Consider an online backup service to protect records from fire, theft, or natural disasters.
Identity theft is a serious risk. After you no longer need a document, destroy it using a shredder. Avoid discarding documents with personal information in regular trash or recycling.
Three-Year Rule
Standard IRS look-back period for most filed returns with no major issues.
Six-Year Rule
May apply if income is substantially underreported or certain complex issues arise.
No Time Limit
No statute of limitations if a required tax return is not filed or fraud is involved.
How long businesses should keep documents
Businesses generate a large volume of paperwork. Use these timelines as a practical framework, and coordinate with your tax professional before destroying long-term records.
Business documents to keep for one year
Short-term operational documents with limited long-term value.
- Correspondence with customers and vendors
- Duplicate deposit slips
- Purchase orders (other than the purchasing department copy)
- Receiving sheets
- Requisitions
- Stenographer’s notebooks
- Stockroom withdrawal forms
Business documents to keep for three years
Records that support HR, insurance, and internal operations.
- Employee personnel records (after termination)
- Employment applications
- Expired insurance policies
- General correspondence
- Internal audit and internal reports
- Petty cash vouchers
- Physical inventory tags
- Savings bond registration records of employees
- Time cards for hourly employees
Business documents to keep for six years
Core accounting and tax records that support business returns.
- Accident reports and claims
- Accounts payable and receivable ledgers and schedules
- Bank statements and reconciliations
- Cancelled checks and stock/bond certificates
- Employment tax records
- Expense analysis and distribution schedules
- Expired contracts and leases
- Expired option records
- Inventories of products, materials, and supplies
- Invoices to customers
- Notes receivable ledgers and schedules
- Payroll records and summaries, including payments to pensioners
- Plant cost ledgers
- Purchasing department copies of purchase orders
- Sales records and subsidiary ledgers
- Time books
- Travel and entertainment records
- Vouchers for payments to vendors and employees
- Voucher register and schedules
Business records to keep forever
Foundational records that document ownership, structure, and long-term tax positions.
- Audit reports from CPAs/accountants
- Cancelled checks for significant or tax-related payments
- Cash books and charts of accounts
- Current contracts and leases
- Corporate documents (incorporation papers, charter, bylaws)
- Documents substantiating fixed asset additions
- Deeds and property records
- Depreciation schedules
- Year-end financial statements
- General and private ledgers, year-end trial balances
- Insurance records, current accident reports, claims, and policies
- Investment trade confirmations
- IRS Revenue Agent reports
- Journals
- Legal records and significant correspondence
- Minutes of directors’ and stockholders’ meetings
- Mortgages and bills of sale
- Property appraisals by outside appraisers
- Retirement and pension records
- Tax returns and supporting worksheets
- Trademark and patent registrations
How long individuals should keep documents
Good recordkeeping protects you during an audit, supports major purchases, and helps track your long-term financial picture. Use these timeframes as a baseline.
Short-term Personal documents to keep for one year
For investment accounts, it is usually enough to keep year-end mutual fund and IRA statements permanently. Once you receive the annual summary, you can typically shred the monthly or quarterly statements from that same year.
Standard Personal documents to keep for three years
- Credit card statements
- Medical bills (in case of insurance disputes)
- Utility records
- Expired insurance policies
Extended Personal documents to keep for six years
- Supporting documents for tax returns
- Accident reports and claims
- Medical bills if they are tax-related
- Sales receipts related to tax items
- Wage garnishment records
- Other tax-related bills
Permanent Personal records to keep forever
- CPA audit reports
- Legal records and important correspondence
- Filed income tax returns
- Proof of income tax payments
- Property records and major improvement receipts (or at least six years after the property is sold)
- Investment trade confirmations
- Retirement and pension records, including Forms 5498, 1099-R, and 8606, until all distributions have been made from your IRA or other qualified plans
Records with their own timeline
Some records do not fit neatly into one-, three-, or six-year buckets. Use the guidelines below as a starting point and keep copies with your tax files whenever they affect your return.
- Car records – keep until the vehicle is sold.
- Credit card receipts – keep until reconciled with your statement.
- Insurance policies – keep for the life of the policy.
- Mortgages, deeds, and leases – keep for six years beyond the end of the agreement.
- Pay stubs – keep until reconciled with your Form W-2.
- Sales receipts – keep for the life of the warranty.
- Stock and bond records – keep for six years after selling the investment.
- Warranties and instructions – keep for the life of the product.
- Other household bills – keep until payment appears on the next statement.
- Depreciation schedules and capital asset records – generally keep for at least three years after the asset’s tax life or after it is disposed of, whichever is later.
