The retention period of a document 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 Documents To Keep For Three Years

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

-Supporting Documents For Tax Returns
-Accident Reports and Claims
-Medical Bills (if tax-related)
-Property Records / Improvement Receipts
-Sales Receipts
-Wage Garnishments
-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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