 | Larry Sell
is a partner of Regier Carr & Monroe, L.L.P., a regional accounting firm with offices in Wichita, Tulsa and Tucson. The firm was founded in Wichita in 1948 and Larry joined the firm in 1976. He is currently the partner in charge of the Wichita office and serves clients in the tax consulting and small business consulting areas.
Larry graduated from Wichita State University in 1974 and currently lives in the Andover area with his wife Michelle and daughter Angelica.
Larry can be reached at Regier Carr & Monroe, L.L.P., Suite 100, 300 West Douglas, Wichita, Kansas 67202, by phone at (316) 264-2335 or (800) 798-2305, by fax at (316) 264-1489 or by e-mail at larry.sell@rcmcpa.com. The firm also has a web site at www.rcmllp.com that offers helpful information. |
Taxes & Accounting
2002-07-01 12:16:00
How long do I need to keep my records?
Question: How long does one need to keep records?
Answer: This is a very common question that arises throughout the year, and especially as the spring house cleaning and organization gets into full swing. Below are general guides to follow:IndividualsHow 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) -Permanently; 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 years; Home improvement receipts and cancelled checks - Ownership period + 7 years; Home repair receipts and cancelled checks - Warranty period for all items; Retirement plan annual reports - Permanently; IRA annual reports - Permanently; IRA nondeductible contributions (Form 8606) - Permanently; Insurance policies - Life of policy + 3 years (Check with your agent. Liability for prior years can vary.); Divorce documents - Permanently; Loans - Term of loan + 7 years; Estate planning documents - Permanently.BusinessesIn business, good recordkeeping is essential not only for tax reporting purposes but also for the success of the company. The guidelines below give retention periods for the most common business records. Accounts payable - 7 years; Accounts receivable - 7 years; Audit reports - Permanently; Chart of accounts - Permanently; Depreciation schedules - Permanently; Expense records - 7 years; Financial statements (annual) - Permanently; Fixed asset purchases - Permanently; General ledger - Permanently; Inventory records - 7 years (Permanent for LIFO system); Loan payment schedules - 7 years; Purchase orders (1 copy) - 7 years; Sales records - 7 years; Tax returns - Permanently; Bank reconciliations - 2 years; Bank statements - 7 years; Cancelled checks - 7 years (Permanent for real estate purchases); Electronic payment records - 7 years; Board minutes - Permanently; Bylaws - Permanently; Business licenses - Permanently; Contracts (major) - Permanently; Contracts (minor) - Life + 4 years; Insurance policies - Life + 3 years (Check with your agent. Liability for prior years can vary); Leases/mortgages - Permanently; Patents/trademarks - Permanently; Shareholder records - Permanently; Stock registers - Permanently; Stock transactions - Permanently; Benefit plans - Permanently; Employee files (ex-employees) - 7 years (Or statute of limitations for employee lawsuits); Employment applications - 3 years; Employment taxes - 7 years; Payroll records - 7 years; Pension/profit sharing plans - Permanently; Construction records - Permanently; Leasehold improvements - Permanently; Lease payment records - Life + 4 years.
