This time of year is good for spring cleaning of all sorts. As clients dig out their tax records they come across old bank statements, real estate records and other mounds of paper gathering dust. Then they ask us if it's necessary to keep all of this clutter. Here are some general guidelines on how long to keep certain records.
Keep these records forever...
Copies of tax returns
Tax and legal correspondence
Audit reports
Contracts and leases
Real estate records
Corporate minutes and stock records
Keep these records for a minimum of six years...
Bank statements
General ledger and journals
Sales records and journals
Personal investment records (starting from date of sale)
IRA records (starting from date of withdrawal)
Keep these records for a minimum of three years...
Employee expense records
Canceled checks
Paid vendor invoices
Employee payroll records
Depreciation records (starting with the end of the asset's tax life)
These are general guidelines and if you search the web you will find others with varying time periods. One of my favorites is several years old but still valuable for the specific categories it covers. You can get it online from the Massachusetts Society of CPA's. You should consider the above guidelines minimums when deciding which records to keep and which ones to destroy.