How Long Do I Need To Keep Documents for Tax Purposes?

 

There is no simple answer for this question so we provided a chart below. Certain documents need to be kept permanently while others should be kept until the statute of limitations expires. The statute of limitations for federal tax returns is usually three years from the date the return was due or filed, or two years from the date the tax was paid, whichever is later. The statute of limitations is usually longer for state tax returns.

The federal three year rule has some EXCEPTIONS:

  • The assessment period is extended to six years instead of three years if you do not report income that you should report, and it is more than 25% of the gross income shown on your tax return.

  • There is no time frame for the IRS to access tax and tax records must be kept indefinitely if you do NOT file a tax return, OR you file a fraudulent tax return.

  • You must keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.

NOTES: Tax returns that are filed BEFORE the due date are considered to be filed on the due date.

Can I Store Documents Electronically?

Yes, you can either keep a physical paper copy or an electronic copy such a PDF PDF or image file (examples: JPG, GIF, TIFF). Be aware that many documents are printed on thermal paper and will fade over time. We highly suggest you make a photocopy of these documents or store them electronically.

Below is a chart showing the documents you should keep and the time period to retain the documents:

Documents Retention For Individuals
Type of Document Retention Period
Income Tax Returns 7 Years
Gift and Estate Tax Returns Permanently
W-2's, 1095's, 1098's, 1099's, and K-1's 7 Years
Bank Statements and Cancelled Checks 7 Years
Credit Card Statements and Receipts 7 Years
Charitable Contribution Documentation 7 Years
Mileage Logs 7 Years
Receipts for Items on Tax Return 7 Years
Investment Purchases and Sales Period of Ownership + 7 Years AFTER Sale
Dividend Reinvestment Records Period of Ownership + 7 Years AFTER Sale
Year-End Brokerage Statements Period of Ownership + 7 Years AFTER Sale
Mutual Fund Annual Statements Period of Ownership + 7 Years AFTER Sale
Real Estate Purchases Period of Ownership + 7 Years AFTER Sale
Home Improvement Receipts and Checks Period of Ownership + 7 Years AFTER Sale
IRA and Other Retirement Plan Annual Forms 5498 Permanently
IRA Nondeductible Contributions - Form 8606 Permanently
Contributions to Roth IRAs Period of Ownership + 7 Years AFTER Final Withdrawal from Roth IRA
Insurance Policies Life of Policy + 3 Years
Loans Term of Loan + 7 Years
Depreciation, Amortization, and Depletion Schedules Period of Ownership + 7 Years AFTER Sale
Credits that Affect Basis of Property such as Energy Credits and Homebuyer Credits Period of Ownership + 7 Years AFTER Sale
Records of Nontaxable Income 7 Years
Birth Certificates, Death Certificates, Divorce and Separation Papers, Voter Registration, Selective Service Registration, Passports, Social Security Cards, Marriage Licenses, Wills, Trusts, Deeds for Real Estate, Mortgage Papers, Vehicle Titles, Adoption Papers Permanently

 

Documents Retention For Businesses
Type of Document Retention Period
Income Tax Returns Permanently
Sales and Use Tax Returns 7 Years
Bank Statements, Bank Deposit Slips, and Cancelled Checks 7 Years
Credit Card Statements and Receipts 7 Years
Charitable Contribution Documentation 7 Years
Mileage Logs 7 Years
Receipts for Items on Tax Return 7 Years
Expense Records 7 Years
Investment Purchases and Sales Period of Ownership + 7 Years AFTER Sale
Real Estate Purchases Period of Ownership + 7 Years AFTER Sale
Loans Term of Loan + 7 Years
Depreciation, Amortization, and Depletion Schedules Period of Ownership + 7 Years AFTER Sale
Credits that Affect Basis of Property Period of Ownership + 7 Years AFTER Sale
Payroll Tax Returns 7 Years
W-2's, W-3's, 1096's and 1099's 7 Years
Employee Files 7 Years AFTER Termination
Employee Applications 3 Years
Forms W-4 While in Effect + 4 Years
Forms I-9 3 Years After Hire OR 1 Year After Termination, Whichever is LATER
Time Cards 4 Years
Payroll Journals 4 Years
Employee Garnishments 5 Years
Retirement & Profit Sharing Plan Agreements Permanently
Employee Benefit Plans Permanently
Engagement Letters Length of Engagement + 3 Years
Leases / Mortgages Permanently
Patents / Trademarks Permanently
Insurance Policies Life of Policy + 3 Years
Accounts Payable 7 Years
Accounts Receivable 7 Years
Audit Reports Permanently
Chart of Accounts Permanently
Financial Statements - Annual Permanently
Fixed Asset Purchases Permanently
General Ledger Permanently
Inventory Records 7 Years OR Permanently if Using LIFO Method
Purchase Orders Permanently
Sales Records Permanently
Shareholder / Member Records Permanently
Stock Registers / Membership Registers Permanently
Annual Minutes Permanently
Bylaws Permanently
Business Licenses / Occupational Licenses Permanently
Contracts - Major Life of Contract + 4 Years
Contracts - Minor Life of Contract + 3 Years