Record Retention - Some Basic Guidelines
Overwhelmed by paper and running out of storage space? A common question is, “How long must one keep all this stuff?" Unfortunately, the answer is "It depends." We thought it might be helpful to give you some basic guidelines.
According to federal and state tax laws, the length of time you should keep a document depends on the action, expense, or event that the document records. Generally, you must keep the records that support an item of income or deductions on a tax return until the period of limitations for that return runs out.
The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax. The information below contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.
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Keep Forever |
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Birth Certificates Adoption Papers Custody Agreements Marriage Certificates Passports Property Deeds Divorce Papers Death Certificates Record of governmental employment Retirement and pension records Tax forms and supporting records relating to non-deductible IRA contributions
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Keep Three Years |
Keep Seven Years |
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Medical Bills
Utility Records
Expired Insurance Policies |
Tax returns Supporting documents for returns/deductions:W-2s, 1099s, receipts Receipts for home improvements that can be added to tax basis of home 7 years after a home is sold if it is not a “rollover” transaction All of the following IF tax related: Bank statements, cancelled checks, medical bills, property records, sales receipts, utility records, invoices.
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What about all of those other stacks of papers that are piling up, but are not tax related? This should help:
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Paperwork |
How long to keep? |
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Credit Card Receipts |
Until verified on statement |
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Car records |
Until the car is sold |
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Insurance Policies |
The life of the policy |
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Mortgages / Deeds / Leases |
Seven years beyond agreement |
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Pay stubs |
Until reconciled with your W-2 |
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Contracts |
Seven years beyond agreement |
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Brokers’ confirmation for purchase |
Until security is sold |
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Property record / Improvement receipts |
Until property is sold |
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Sales receipts |
For the life of the warranty |
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Warranties, extended service agreements |
For the life of the product or expiration of warranty |
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Household operating bills |
Until payment is verified on the next bill |