Record Retention Guidelines
We are often asked about how long tax and business records should be kept. Discarding records that should be kept poses a wide range of potential tax and legal problems. Keeping reports too long wastes precious space and resources.
But how long should these files be kept? Generally, the files should be kept as long as they serve a useful purpose or until all legal and regulatory requirements are met.
Below is a record retention guideline to assist you in keeping your records up to date and organized. Please note this table should only be used as a guide. You should consult your business attorney or insurance carrier, as applicable, when establishing a record retention policy.
It is your responsibility to keep and protect your original documents and records for any possible future use, including potential examination by government agencies.
BUSINESS – ACCOUNTING RECORDS
Accounts payable – 7 years
Accounts receivable – 7 years
Audit reports – Permanent
Chart of accounts – Permanent
Depreciation schedules – Permanent
Expense records – 7 years
Financial statements (annual) – Permanent
General Ledger – Permanent
Inventory records – 7 years
Inventory records – LIFO – Permanent
Loan payment schedules – 7 years
Purchase orders – 7 years
Sales records – 7 years
Tax returns – Permanent
BUSINESS – BANK RECORDS
Bank reconciliations – 2 years
Bank statements – 2 years
Cancelled checks – 7 years (permanent for Real Estate)
Electronic payment records – 7 years
BUSINESS – EMPLOYEE RECORDS
Benefit plans – Permanent
Employee files – 7 years or (former employees) state statute for lawsuits
Employment applications – 3 years
Employment taxes – 7 years
Payroll records – 7 years
BUSINESS – REAL PROPERTY RECORDS
Construction records – Permanent
Lease payment records – Life + 4 years
Leasehold improvements – Permanent
Real estate purchases – Permanent
BUSINESS – GENERAL RECORDS
Board minutes – Permanent
Business licenses – Permanent
Bylaws – Permanent
Contracts – major – Permanent
Contracts – minor – Life + 4 years
Insurance policies – Life + 3 years
Leases – Permanent
Mortgages – Permanent
Patents – Permanent
Shareholder records – Permanent
Stock registers – Permanent
Stock Transactions – Permanent
Trademarks – Permanent
INDIVIDUAL RECORDS
Divorce documents – Permanent
Estate planning documents – Permanent
Home improvement receipts – Ownership period + 7 years
Home purchase documents – Ownership period + 7 years
Insurance policies – Life of policy + 3 years
Loan documents – Term of loan + 7 years
Retirement plan annual reports – Permanent
Tax returns & all supporting documents – 7 years