Resources & Tools
Record Retention

Retaining and storing your income tax records is an important final step of your tax filing responsibility.

When determining how long to keep most of your income tax records, we look at the time frame over which the IRS can audit a return. For most taxpayers, this period is three years from the original due date of the return. For example, if you file your 2014 Form 1040 on or before April 15, 2015, the IRS has until April 15, 2018 to audit the return. However, if income is under reported by more than 25%, the Statute of Limitations is extended to six years.

A good rule of thumb for keeping tax records is to add a year to the IRS Statute of Limitations period. Using this approach, you should keep your income tax records for a minimum of four years, but it may be more prudent to retain them for seven years, which is what the IRS informally recommends.

Here are recommended retention periods for various records:

Records Retention Period
Cancelled checks 7 years
Credit card receipts 7 years
Paid invoices 7 years
Bank deposit slips 7 years
Bank statements 7 years
Tax returns (uncomplicated) 7 years
Tax returns (all others) Permanent
Employment tax returns 7 years
Expense records 7 years
Financial statements Permanent
Minutes of meetings Life of company plus 7 years
Corporate stock records Permanent
Employee records Period of employment plus 7 years
Depreaciation schedules Life of assets plus 7 years
Real estate records Ownership period plus 7 years
Journal & general ledger Life of business plus 7 years
Inventory records 7 years
Home purchase & improvement records Ownership period plus 7 years
Investment records Ownership period plus 7 years