back to list of articles

Record Retention Guide

Good record keeping can cut your taxes and make your financial life easier.

How long to keep records is a combination of judgment and state and federal statutes of limitations. Since federal tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects underreported income, it’s wise to keep tax records at least seven years after a return is filed. Requirements for records kept electronically are the same as for paper records.

Generally, follow these recommended retention periods for various documents:

Tax returns (uncomplicated): 7 years

Tax returns (all others): Permanent

W-2s: 7 years

1099s: 7 years

Cancelled checks supporting tax deductions: 7 years

Bank deposit slips: 7 years

Bank statements: 7 years

Charitable contribution documentation: 7 years

Credit card statements: 7 years

Receipts, diaries, logs pertaining to tax return: 7 years

Investment purchase and sales slips: Ownership period + 7 years

Dividend reinvestment records: Ownership period + 7 years

Year-end brokerage statements: Ownership period + 7 years

Mutual fund annual statements: Ownership period + 7 years

Investment property purchase documents: Ownership period + 7 years

Home purchase documents: Ownership period + 7 years¹

Home improvement receipts and cancelled checks: Ownership period + 7 years¹

Home repair receipts and cancelled checks: Warranty period for item

Retirement plan annual reports: Permanent

IRA annual reports: Permanent

IRA nondeductible contributions (Form 8606): Permanent

Insurance policies: Life of policy + 3 years²

Divorce documents: Permanent

Loans: Term of loan + 7 years

Estate planning documents: Permanent

1 Keep indefinitely where tax rollovers are involved.

2 Check with your agent. Liability for prior years can vary.

 Securities and investment advisory services offered through FSC Securities Corporation, member NASD,  SIPC and a registered investment advisor.  Additional investment advisory services offered through Future Finances, Inc., a registered investment adviser not affiliated with FSC Securities Corporation and is not a broker-dealer.

© 2007 Future Finances, Inc. All rights reserved.