Tax preparation firm Herman & Company, CPA’s, has all the answers to your personal finance questions!
Just how long you should keep records is a matter of judgement, space, and a combination of state and federal statutes of limitations.
Returns can be audited for up to 3 years after filing for your Federal return (6 years if underreported income is involved). So all records substantiating tax deductions should be kept for at least that long.
Following are recommended retention periods for the listed records:
Records Retention Period
Cancelled Checks 7 years
Bank Deposit Slips 7 years
Bank Statements 7 years
Tax Returns permanent
Employment tax returns 7 years
Expense reports 7 years
Entertainment records 7 years
Financial Statements permanent
Minutes of meetings Life of Company plus 7 years
Corporate stock records permanent
Employee records Period of employment Plus 7 years
Depreciation schedules Life of Business Plus 7 years
Real Estate records Permanent
General ledger Life of Business Plus 7 years
Inventory records 7 years
Home improvement records Ownership period Plus 7 years
Investment records Ownership period Plus 7 years