Document Retention Guide
for Individuals
Storing individual tax records:
How long is long enough?
Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.
However, if the IRS believes you have significantly under-reported your income (by 25 percent or more), it may go back six years in an audit. In addition, the statute of limitations in some states exceeds the federal statute, or the states have laws or regulations that require taxpayers to maintain records beyond the state’s statute of limitations, often to verify carryovers, etc. Tailor your years of retention to the longer of the federal or state requirements.
In deciding your own record retention schedule, consider indefinitely keeping those records that cannot be recreated by any other office, institution or governmental unit. Also, keep in mind your own financial concerns that may affect the length of time you keep your records. Most importantly, consult with your attorney for approval of any record retention policy.
Keep For One Year
While it's important to keep year-end mutual fund and IRA contribution statements forever, you don't have to save monthly and quarterly statements once the year-end statement has arrived.
Keep For Three Years
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Credit Card Statements
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Medical Bills (in case of insurance disputes)
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Utility Records
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Expired Insurance Policies
Keep For Six Years
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Supporting Documents For Tax Returns
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Accident Reports and Claims
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Medical Bills (if tax-related)
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Sales Receipts
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Wage Garnishments
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Other Tax-Related Bills
Personal Records To Keep Forever
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CPA Audit Reports
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Legal Records
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Important Correspondence
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Income Tax Returns
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Income Tax Payment Checks
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Property Records / Improvement Receipts (or six years after property sold)
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Investment Trade Confirmations
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Retirement and Pension Records (Forms 5448, 1099-R and 8606 until all distributions are made from your IRA or other qualified plan)
Special Circumstances
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Car Records (keep until the car is sold)
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Credit Card Receipts (keep until verified on your statement)
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Insurance Policies (keep for the life of the policy)
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Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
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Pay Stubs (keep until reconciled with your W-2)
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Sales Receipts (keep for life of the warranty)
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Stock and Bond Records (keep for 6 years beyond selling)
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Warranties and Instructions (keep for the life of the product)
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Other Bills (keep until payment is verified on the next bill)
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Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)