The document retention period is an aspect of records management. It represents the period of time a document should be kept or “retained”. At the termination of the retention period, the document is usually destroyed. The term is generally used by accountants and tax professionals whose occupation involves dealing with legal documents that only need to remain in existence for a certain amount of time. The retention period varies for different types of records. For example, business incorporation documents have a permanent retention period (meaning that they should be retained and never be destroyed), but receipts for tax-deductible purchases by an individual taxpayer usually have a three-year retention period (and can often be safely discarded after that point.) The length of the retention period is based on the likelihood that the document will be needed at some point in the future.

Records that will serve no further purpose (as determined by the length of their retention period) are destroyed for space issues, usually by paper shredders. Retention requirements are also established for a variety of electronic records in industry-specific legislation (such as the Sarbanes-Oxley Act) and regulatory bodies (such as the Federal Energy Regulatory Commission) in the United States.

Business Document To Keep For One Year

  1. Correspondence with Customers and Vendors
  2. Duplicate Deposit Slips
  3. Purchase Orders (other than Purchasing Department copy)
  4. Receiving Sheets
  5. Requisitions
  6. Stenographer’s Notebooks
  7. Stockroom Withdrawal Forms

Business Documents To Keep For Three Years

  1. Bank Statements and Reconciliation
  2. Employee Personnel Records (after termination)
  3. Employment Applications
  4. Expired Insurance Policies
  5. General Correspondence
  6. Internal Audit Reports
  7. Internal Reports
  8. Petty Cash Vouchers
  9. Physical Inventory Tags
  10. Savings Bond Registration Records of Employees
  11. Time Cards For Hourly Employees

Business Documents To Keep For Six Years

  1. Accident Reports, Claims
  2. Accounts Payable Ledgers and Schedules
  3. Accounts Receivable Ledgers and Schedules
  4. Cancelled Checks
  5. Cancelled Stock and Bond Certificates
  6. Employment Tax Records
  7. Expense Analysis and Expense Distribution Schedules
  8. Expired Contracts, Leases
  9. Expired Option Records
  10. Inventories of Products, Materials, Supplies
  11. Invoices to Customers
  12. Notes Receivable Ledgers, Schedules
  13. Payroll Records and Summaries, including payment to pensioners
  14. Plant Cost Ledgers
  15. Purchasing Department Copies of Purchase Orders
  16. Sales Records
  17. Subsidiary Ledgers
  18. Time Books
  19. Travel and Entertainment Records
  20. Vouchers for Payments to Vendors, Employees, etc.
  21. Voucher Register, Schedules

Business Records To Keep Forever

While federal guidelines do not require you to keep tax records “forever,” in many cases there will be other reasons you’ll want to retain these documents indefinitely.

  1. Audit Reports from CPAs/Accountants
  2. Cancelled Checks for Important Payments (especially tax payments)
  3. Cash Books, Charts of Accounts
  4. Contracts, Leases Currently in Effect
  5. Corporate Documents (incorporation, charter, by-laws, etc.)
  6. Documents substantiating fixed asset additions
  7. Deeds
  8. Depreciation Schedules
  9. Financial Statements (Year End)
  10. General and Private Ledgers, Year End Trial Balances
  11. Insurance Records, Current Accident Reports, Claims, Policies
  12. Investment Trade Confirmations
  13. IRS Revenue Agents’ Reports
  14. Journals
  15. Legal Records, Correspondence and Other Important Matters
  16. Minutes Books of Directors and Stockholders
  17. Mortgages, Bills of Sale
  18. Property Appraisals by Outside Appraisers
  19. Property Records
  20. Retirement and Pension Records
  21. Tax Returns and Worksheets
  22. Trademark and Patent Registrations

Personal Document To Keep For One Year

While it’s important to keep year-end mutual fund and IRA contribution statements forever, you don’t have to save monthly and quarterly statements once the year-end statement has arrived.

Personal Documents To Keep For Three Years

  1. Credit Card Statements
  2. Medical Bills (in case of insurance disputes)
  3. Utility Records
  4. Expired Insurance Policies

Personal Documents To Keep For Six Years

  1. Supporting Documents For Tax Returns
  2. Accident Reports and Claims
  3. Medical Bills (if tax-related)
  4. Property Records / Improvement Receipts
  5. Sales Receipts
  6. Wage Garnishments
  7. Other Tax-Related Bills

Personal Records To Keep Forever

  1. CPA Audit Reports
  2. Legal Records
  3. Important Correspondence
  4. Income Tax Returns
  5. Income Tax Payment Checks
  6. Investment Trade Confirmations
  7. Retirement and Pension Records

Special Circumstances

  1. Car Records (keep until the car is sold)
  2. Credit Card Receipts (keep until verified on your statement)
  3. Insurance Policies (keep for the life of the policy)
  4. Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
  5. Pay Stubs (keep until reconciled with your W-2)
  6. Property Records / improvement receipts (keep until property sold)
  7. Sales Receipts (keep for life of the warranty)
  8. Stock and Bond Records (keep for 6 years beyond selling)
  9. Warranties and Instructions (keep for the life of the product)
  10. Other Bills (keep until payment is verified on the next bill)
  11. Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)
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