Document Shredding Schedule
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
- Bank Statements and Reconciliation’s
- Employee Personnel Records (after termination)
- Employment Applications.
- Expired Insurance Policies
- General Correspondence
- Internal Audit Reports
- Internal Reports
- Petty Cash Vouchers
- Physical Inventory Tags
- Savings Bond Registration Records of Employees
- Time Cards For Hourly Employees
Business Documents To Keep For Six Years
- Accident Reports, Claims
- Accounts Payable Ledgers and Schedules
- Accounts Receivable Ledgers and Schedules
- Cancelled Checks
- Cancelled Stock and Bond Certificates
- Employment Tax Records
- Expense Analysis and Expense Distribution Schedules
- Expired Contracts, Leases
- Expired Option Records
- Inventories of Products, Materials, Supplies
- Invoices to Customers
- Notes Receivable Ledgers, Schedules
- Payroll Records and Summaries, including payment to pensioners
- Plant Cost Ledgers
- Purchasing Department Copies of Purchase Orders
- Sales Records
- Subsidiary Ledgers
- Time Books
- Travel and Entertainment Records
- Vouchers for Payments to Vendors, Employees, etc.
- 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.
- Cancelled Checks for Important Payments (especially tax payments)
- Cash Books, Charts of Accounts
- Contracts, Leases Currently in Effect
- Corporate Documents (incorporation, charter, by-laws, etc.)
- Documents substantiating fixed asset additions
- Deeds
- Depreciation Schedules
- Financial Statements (Year End)
- General and Private Ledgers, Year End Trial Balances
- Insurance Records, Current Accident Reports, Claims, Policies
- Investment Trade Confirmations
- IRS Revenue Agents’ Reports
- Journals
- Legal Records, Correspondence and Other Important Matters
- Minutes Books of Directors and Stockholders
- Mortgages, Bills of Sale
- Property Appraisals by Outside Appraisers
- Property Records
- Retirement and Pension Records
- Tax Returns and Worksheets
- 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
- Credit Card Statements
- Medical Bills (in case of insurance disputes)
- Utility Records
- 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
- -CPA Audit Reports
- -Legal Records
- -Important Correspondence
- -Income Tax Returns
- -Income Tax Payment Checks
- -Investment Trade Confirmations
- -Retirement and Pension Records
Special Circumstances
- -Car Records (keep until the car is sold)
- -Credit Card Receipts (keep until verified on your statement)
- -Insurance Policies (keep for the life of the policy)
- -Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
- -Pay Stubs (keep until reconciled with your W-2)
- -Property Records / improvement receipts (keep until property sold)
- -Sales Receipts (keep for life of the warranty)
- -Stock and Bond Records (keep for 6 years beyond selling)
- -Warranties and Instructions (keep for the life of the product)
- -Other Bills (keep until payment is verified on the next bill)
- -Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)
I have a storage room full of document that my law firm collected for over a decade, I was afraid of trashing the documents and did not know how to proceed. This article helped understand my obligation to IRS and to the station and I realize that I did not have to keep all these documents for a decade and pay for storage all this time. Burning or trashing my documents would have been a nightmare!Your company sent me a truck that I was able to fill, shred and recycle my documents. I feel much better now! The best part is that I did the right thing without violating the law and kept within y budget, Your rates were much lower than Shredit and Cintas of Boston. I ma glad to have chosen your shredding company to help me purge my documents and eliminate the storage fees. A Kumon Attorney At Law Saugus MA
Having a strong and secure document management is vital to the success of any business, when I started my CPA firm, that is the first thing I did because I know how important document security is and I wanted to make sure that my business is in compliance with state and federal laws. HIPAA fines max out at 1.5 Million and that is the tip of the iceberg! Hiring your company was a no brainer, you do the shredding at third party vendor and provide me a digital certificate of destruction to help me comply wit the law. I encourage all other businesses small or large to pay close attention to this area. M. Harshberger, Boston CPA