Our clients frequently ask us for advice on how long they need to attain their various records. Often times, the requirements for records retention varies based on the circumstances.
For the benefit of our clients as well as you, our readers, the table set forth below will give some general guidelines for record-keeping and documentation.
|Type of Record||Retention Period|
|1. Tax Returns, Forms W-2, Forms 1099, cancelled checks supporting tax deductions, bank statements and deposit slips, charitable contributions, confirmations.||7 years. Federal tax records are generally audited up to 3 years after filing and up to 6 years for unreported income. There is no time limit if you failed to file your return or filed a fraudulent return.|
|2. Credit Card Statements and Credit Card Receipts.||45 days or 7 years. If the statement involves tax related expenses, retain for 7 years. Discard the receipts 45 days after received provided that the charges show up on the credit card statement and they are not needed for warranties or merchandise returns in the future. Likewise, discard credit card statements after 45 days unless needed for warranties or merchandise returns or contain tax related expenses. Note that if any credit card receipts or statements involve improvements to your home or other investment properties, such information should be retained for the period that you own the property plus 7 years.|
|3. IRA and other Retirement Plan Records.||One year to permanent. The quarterly statements should be retained until you match them up with the annual summary. If everything matches, you can discard the quarterly statements. Retain the annual summary’s permanently. Also, if you have made non-deductible contributions to an IRA, retain the records permanently showing that you have previously paid tax on the contribution.|
|4. Brokerage and Dividend Reinvestment Statements.||Retain until the securities on the statement are sold plus 7 years.|
|5. Home and Investment Real Estate, purchase documents and improvements evidenced by receipts and cancelled checks.||Ownership period plus 7 years.|
|6. Monthly Bills. (Personal)||Retain bills for large purchases in your insurance file for proof of their value in the event of loss. All other bills can be discarded after 1 year.|
|7. Loan Documents.||Term of loan plus 7 years.|
|8. Paycheck Stubs.||1 year. Annually review your paycheck stubs to your W-2 to make sure the numbers match. If the numbers match, shred the paystubs.|
|9. Divorce Documents.||Permanent.|
|10. Estate Planning Documents.||Permanent.|
|11. Medical Records.||Permanent.|
|12. Military Papers.||Permanent.|
|13. Personal Certificates (Birth, Death, Marriage)||Permanent.|