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Records that should be kept:
- Records of income received
- Expense items, especially work-related expenses
- Home improvements, sales, and refinances
- Investment purchases and sales information
- The estate value of inherited property
- Specific uses of loan proceeds
- Medical expenses
- Charitable contributions
- Interest and taxes paid
- Records on nondeductible IRA contributions
By keeping your records organized it will eliminate the extra cost an accountant would charge for organizing your receipts. |
HOW LONG SHOULD RECORDS BE KEPT? Federal returns can be audited for up to three years after filing (six years if underreported income is involved), so all records substantiating tax deductions should be kept at least that long.
Here are the recommended retention periods for various records:
- Cancelled checks - 7 years
- Credit card receipts - 7 years
- Paid invoices - 7 years
- Bank deposit slips - 7 years
- Bank statements - 7 years
- Tax returns (uncomplicated ) - 7 years
- Tax returns (all others) - Permanent
- Employment tax returns - 7 years
- Expense records - 7 years
- Financial statements - Permanent
- Contracts - Permanent
- Minutes of meetings - Life of company plus 7 years
- Corporate tax records - Permanent
- Employee records - Period of employment plus 7 years
- Depreciation schedules - Life of assets plus 7 years
- Real estate records - Ownership period plus 7 years
- Journal and general ledger - Life of business plus 7 years
- Inventory records - 7 years
- Home purhcase and improvement records - Ownership period plus 7 years
- Investment records - Ownership period plus 7 years.
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