We all know the feeling… it’s time to clean the office and you’re sorting through stacks of documents, filing them away, shredding some, creating more piles… and the questions keep arising. Can I toss this? Is this something important to keep? I’ve been holding on to this for 3 years, surely it’s OK to let it go now?
The short answer is you need to keep them for as long as the IRS can potentially challenge you on the item to which a particular record relates. There is no limit for the IRS to bring an action against someone who has filed a false or fraudulent return.
The following chart provides a general guideline for the retention of many common records. It’s important to note that the specific holding periods of any record retention policy should be given careful scrutiny by management and legal advisors in light of any pending investigations, regulated industry requirements or contract covenants. In other words use this as a guideline, and if in doubt feel free to contact Sweeney Conrad for advice.
| Accounting Records | Retention Time |
| Auditors’ report and annual financial statements | Permanently |
| Bank statements and deposit slips | 7 years |
| Cancelled checks (for the following):
Fixed Assets General Payroll Taxes (payroll related) Taxes (income) |
Permanently 7 years 7 years 7 years Permanently |
| Cash Disbursements Journal | Permanently |
| Cash Receipts Journal | Permanently |
| Chart of Accounts | Permanently |
| Deeds, mortgages, bills of sale | Permanently |
| Electronic Payment Records | 7 years |
| Employee Expense Reports | 7 years |
| Fixed Asset Records (Invoices, Depreciation Schedule) | Permanently |
| Freight Bills and Bills of Lading | 7 years |
| General Journal | Permanently |
| General Ledger | Permanently |
| Inventory Listings and Tags | 7 years |
| Invoices: Sales to Customers/Credit Memos | 7 years |
| Patent/Trademark and Related Papers | Permanently |
| Payroll Journal | Permanently |
| Production and Sales Reports | 7 years |
| Purchases | 7 years |
| Purchase Journal | Permanently |
| Purchase Orders | 7 years |
| Sales or Work Orders | 7 years |
| Subsidiary Ledgers (Accounts Receivable, Accounts Payable, Equipment) | 7 years |
| Time Cards and Daily Time Reports | 7 years |
| Training Manuals | Permanently |
| Trial Balance- Year End | Permanently |
| Insurance Records | Retention Time |
| Accident Reports and Settled Claims | 6 years after settlement |
| Fire Inspection and Safety Reports | 7 years |
| Insurance Policies (After Expiration) | 7 years |
| Legal Documents | Retention Time |
| Articles of Incorporations and Bylaws | Permanently |
| Amendments to Above | Permanently |
| Buy-sell Agreements | Permanently |
| Contracts and leases (after expiration) | 7 years |
| Employment Agreements | 7 years |
| Legal Correspondence | Permanently |
| Minutes | Permanently |
| Partnership Agreements | Permanently |
| Real Estate | Permanently |
| Stock Certificates and Ledgers | Permanently |
| Tax and Legal Correspondence | Permanently |
| Tax Records | Retention Time |
| IRS or FTB Adjustments | Permanently |
| Payroll Tax Returns | Permanently |
| Property Basis Records | Permanently |
| Sales and Use Tax Returns | Permanently |
| Tax Returns as Filed (Copies) | Permanently |
| Tax Returns & Cancelled Checks for Tax Payments | Permanently |
