April 19, 2010
Dear Client:
We have been asked many times lately, How long do I need to keep my financial records? The general rule is that such books and records must be kept as long as they may be relevant to a taxpayer's claim for a tax credit or refund, or to an Internal Revenue Service attempt to assess additional tax for the year in question. We recommend the following document retention periods as general guidelines. In some cases, the retention period recommended may be for non-tax reason - for example, real estate records should be kept forever for environmental liability exposure reasons.
|
Type of Record |
Retention Period |
| Copies of tax returns as filed |
Forever |
|
Tax and legal correspondence |
Forever |
|
Audit reports |
Forever |
|
General ledger and journals |
Forever |
|
Annual financial statements |
Forever |
|
Contracts and leases |
Forever |
|
Real estate records |
Forever |
| Corporate stock records and minutes |
Forever |
|
Bank statements and deposit slips |
4 years |
|
Sales records and journals |
4 years |
| Other records relating to revenue |
4 years |
| Employee expense reports and records relating to travel and entertainment expenses |
4 years |
| Canceled checks |
4 years |
|
Paid vendor invoices |
4 years |
|
Employee payroll expense records |
4 years |
| Inventory records |
4 years |
|
Depreciation schedules |
At least tax life of asset plus 3 years |
|
Other capital asset records |
At least tax life of asset plus 3 years |
| Other records relating to expenses |
4 years |
All records related to a tax return should be kept for at least six years if there is any concern that the Internal Revenue Service could show a significant understatement of gross income on the return.
Remember, these are general guidelines. If you have any questions or concerns, please do not hesitate to call.
Very truly yours,
