How long is long enough?

A workspace with a stack of manila folders, a pen holder with pens, a magnifying glass, a document labeled 'Records,' a sheet titled 'Documents,' a calculator, some coins, a wooden box with sticky notes, and potted plants. The overlay text reads 'Record Retention Guide.'

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.

Record Retention Guide

    • Bank Statements

    • Paycheck Stubs (reconcile with W-2)

    • Canceled checks

    • Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)

    • Credit Card Statements

    • Medical Bills (in case of insurance disputes)

    • Expired Insurance Policies

    • Tax Returns

    • 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

    • CPA Audit Reports

    • Legal Records

    • Important Correspondence

    • Retirement and Pension Records

    • Employee Personnel Records (after termination)

    • Employment Applications

    • Expired Insurance Policies

    • General Correspondence

    • Savings Bond Registration Records of Employees

    • Accident Reports, Claims

    • Bank Statements and Reconciliations

    • Cancelled Checks

    • Employment Tax Records

    • Expired Contracts, Leases

    • Inventories of Products, Materials, Supplies

    • Invoices to Customers

    • Notes Receivable Ledgers, Schedules

    • Payroll Records and Summaries, including payment to pensioners

    • Purchasing Department Copies of Purchase Orders

    • Sales Records

    • Travel and Entertainment Records

    • Vouchers for Payments to Vendors, Employees, etc.

  • 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.

    • Audit Reports from CPAs/Accountants

    • Cancelled Checks for Important Payments (especially tax payments)

    • Contracts, Leases Currently in Effect

    • Corporate Documents (incorporation, charter, by-laws, etc.)

    • Deeds

    • Insurance Records, Current Accident Reports, Claims, Policies

    • Investment Trade Confirmations

    • IRS Revenue Agents' Reports

    • Legal Records, Correspondence and Other Important Matters

    • Mortgages, Bills of Sale

    • Property Appraisals by Outside Appraisers

    • Property Records

    • Retirement and Pension Records

    • Trademark and Patent Registrations