How long should I keep my tax returns? Do I need to hold on to this box of receipts? What do I do with my bank statements? When can I get rid of my pay stubs from my old job? Do I need to keep my utility bills?

While some people may hold on to paperwork hoping to become famous on the next television episode of Hoarders, some general guidelines apply to everyone.

General Rules

How long should I keep my tax returns? Do I need to hold on to this box of receipts? What do I do with my bank statements? When can I get rid of my pay stubs from my old job? Do I need to keep my utility bills?

While some people may hold on to paperwork hoping to become famous on the next television episode of Hoarders, some general guidelines apply to everyone.

Retain records that support items shown on your tax return at least until the statute of limitations runs out — generally three years from the due date of the return or the date you filed, whichever is later. That means after April 15, 2021, you can potentially throw out records for the 2017 tax year if you filed the return for that year by the regular filing deadline. But some records should be kept longer.

For example, there’s no statute of limitations if you fail to file a tax return or file a fraudulent one. So you’ll generally want to keep copies of your returns themselves permanently, to substantiate filing a legitimate return. Also bear in mind that, if you understate your gross income by more than 25%, the statute of limitations period is six years. Additionally, taxpayers who file an amended return, the statute of limitations is extended to three years from the date of the amended return.

Documents and records should be kept in a secure location. Electronic records should be routinely backed up. Documents no longer needed to be retained should be properly disposed of to protect personal and confidential information.

Personal Documents

Some personal documents can be destroyed after the statute of limitations expires. However, there are reasons to hold on to some items for longer than required. Some individuals may find these records hold sentimental value that may be recalled later in life or passed on to future generations. For example, records showing the cost of various items (gasoline, groceries, utilities, etc.) can help recreate valuable memories or may be of interest to genealogy enthusiasts.

Personal Documents to Keep for One Year
  • Monthly / Quarterly investment, mutual fund, and retirement statements until year end statement is received
Personal Documents to Keep for Three Years
  • Credit Card Statements
  • Expired Insurance Policies
  • Medical Bills (for insurance purposes)
  • Utility Records
Personal Documents to Keep for Six Years
  • Bank statements and reconciliations
  • Medical Bills (for tax purposes)
  • Sales Receipts (tax related)
  • Supporting Tax Return Documents (W-2’s, 1099’s, etc)
  • Wage Garnishments
  • Other tax related documents
Personal Documents to Keep Permanently
  • Legal Records
  • Important Correspondence
  • Income Tax Returns (including proof of payment)
  • Investment and Retirement Plan Statements
  • Investment Trade Confirmations (minimum of six years from date sold. Retain longer if wash-sale rules apply.)
  • Property Records (minimum of six years from date sold)
  • Retirement and Pension Plan documents (minimum of six years after final distribution)
Other Considerations
  • Vehicle Service and Maintenance Records – Until vehicle is sold
  • Credit Card receipts – until reconciled on statement (unless used for tax purposes, then keep for six years)
  • Insurance Policies – for the life of the policy (unless claim considerations apply)
  • Leases – keep for six years from end of lease term
  • Pay stubs – until reconciled with W-2
  • Property Records – minimum of six years from date sold
  • Sales receipts – Until expiration of product warranty
  • Warranties and Product Instructions – for life of the product
  • Bills (not used for tax purposes) – until payment is verified on next bill
  • Depreciation Schedules and Capital Asset Records – three years from asset disposal
  • Bank statements – keep permanently for years tax returns are not require to be filed

Business Documents

Not only should small business owners keep good records, but owners should also know which of those records to retain and for how long. Record retention is the practice of keeping business and personal records over time.

Good record retention is in the best interest of companies. A poor system of retention will prevent managers from retrieving information needed to make sound business decisions. A poor record keeping retention system also poses a security risk.

The Internal Revenue Service (IRS) determines some record retention guidelines. Other retention requirements are legal in nature, such as what may be required by contract with those you do business with. Expert recommendations vary. Also, retention schedules vary by region. For example, a state may have a different statute of limitation for legal liability (law suits). Check with your attorney for legal requirements.

In the event of a business closure, permanent records should continue to be kept as long as possible (at least ten years from ceasing operations).

Business Documents to Keep Permanently
  • Organizational Documents (Articles of Incorporation, By-laws, Partnership Agreements, Charters, etc.)
  • Business Licenses
  • Minutes of Board and Stockholder Meetings
  • Legal records, correspondence, and other important matters
  • Annual Financial Reports (and accompanying auditor reports)
  • Patents and Trademark Registrations
  • Deeds and Property Records (including appraisals)
  • General Ledgers, Year-end Trial Balances, Financial Statements
  • Retirement Plan documents
  • Tax Returns including proof of payment (Federal, State, and Local)
Business Documents to Keep for Three Years
  • Budgets
  • Employment Applications (not hired)
  • General correspondence
  • Purchase requisitions
Business Documents to Keep for Four Years
  • Banking Records (deposit slips, statements, reconciliations, cancelled checks)
  • Bills of Lading
  • Credit memos
  • Employee expense reports (mileage and reimbursement accounts)
  • Internal Reports (work orders, sales reports, production reports)
  • Invoices
  • Inventory Records
  • Payroll journals and employee time cards
  • Payroll Tax Returns (Forms 941, W-3, W-2 returned as undeliverable)
Business Documents to Keep for Seven Years
  • Business contracts *
  • Business Licenses *
  • Interim Financial Reports
  • Subsidiary Ledgers
  • Lease Agreements *
  • Employee Personnel Files */**
  • MSHA/OSHA Reports **
  • Safety Reports **
  • Insurance Policies **
  • Employee Benefit Policies *
  • Bad debts / worthless securities
  • Fixed Asset records *

* Documents should be kept for seven years from termination of contract or end of employment.

** Documents should be kept for seven years unless a claim has been filed. For claim related documents, retain records for ten years from date of claim settlement.

Business Documents to Keep for Ten Years
  • Insurance Claims and related documents

The document retention times listed above are general recommendations. Consideration should be given to pending litigation, industry recommendations, and consultation with your lawyer and accountant.