Do you know how long you are supposed to keep documents? Do you know when it’s safe to shred? Having this knowledge is the first step to good recordkeeping. By following these guidelines, you can keep your documents and files organized and updated. Avoid keeping things you don’t need – or discarding something you should have kept permanently!
First—categorize your documents. Examples include past tax returns and supporting documentation, medical information, purchase contracts for large assets, legal matters, employment information, insurance records, property deeds, etc.
Second—determine how you will store your records. Do you want to archive everything digitally? Do you prefer to keep paper copies? When considering how to store your records, think about worst-case scenarios such as fire, burglary, natural disaster, or even something as simple as snooping family members. Regardless of how you store your records, they should always be easily accessible.
Third—label documents with a “keep until” date. Refer to the guide below for suggested lengths of time to keep your important documents. Labeling files with a “destroy” date will help ensure that your records will remain organized and current.
Fourth—destroy records that are no longer needed. To minimize the risk of identity theft, it is very important that you permanently destroy documents. If the items are paper, shred or incinerate them. If you have a large amount of shredding, consider taking it to a shredding facility. Occasionally, community organizations will offer complimentary document shredding on specific dates. If your documents are stored on a computer, use specialized software to remove files or delete an entire hard drive’s data. Another option is physically destroying the hard drive if you plan to stop using the computer entirely.
Having a system in place for your record retention will not only make it easier to locate important documents quickly and keep unnecessary documents to a minimum, but it will also give you something priceless—peace of mind.
TYPE OF RECORD AND SUGGESTED LENGTH OF RETENTION
BUSINESS RECORDS
I. Accounting Records
Bank Statements & Deposit – 3 years
Individual Payroll Records – 8 years
Payroll Timecard/Sheets – 3 years
Expense Reports – 6 years
Accounts Payable/Receivable Reports – 6 years
Trial Balance Reports – 6 years
Payment Vouchers (all) – 8 years
All Canceled Checks – 8 years
Audit Reports – 7 years
General Ledgers and Journals – 7 years
II. Sales, Purchase, Shipping Records
Sales Contracts & Invoices – 3 years
Requisition/Purchase Orders – 3 years
Export Declaration & Manifests – 4 years
Freights, Shipping, & Receiving Reports – 4 years
Bills of Lading Records – 4 years
III. Personnel Records
Daily Time Reports – 6 years
Withholding Tax Statements – 6 years
Disability & Sick Benefits Records – 6 years
Expired Contracts – 6 years
Files of Terminated Personnel – 6 years
IV. Corporate Records
Expired Notes, Leases & Mortgages – 6 years
All Cash Books – 7 years
Contracts & Agreements – Indefinitely
Property Deed & Easements – Indefinitely
Registration of Copyrights & Trademarks – Indefinitely
Patents – Indefinitely
Corporate By-Laws & Minutes Books – Indefinitely
Capital Stock & Bond Records – Indefinitely
Stock Certificate & Transfer Lists – Indefinitely
Canceled Checks on Asset – Indefinitely
Canceled Checks for Taxes & Contracts – 7 years
Proxies – Indefinitely
Labor Contracts – 7 years
Retirement & Pension Records – 7 years
Tax Returns & All Work Papers – 7 years
V. Insurance Records
All Expired Policies – 4 years
Accident Reports – 6 years
Safety Reports – 8 years
Settlement Claims – 10 years
Group Disability Records – 8 years
Fire Inspection Reports – 6 years
VI. Correspondence
General – All – 3 years
Tax & Legal Communications – 7 years
License & Traffic – 6 years
Sale & Purchase – 6 years
PERSONAL RECORDS
Tax Returns and Related – 7 years
IRA Contribution Records – Permanently
Retirement/Savings Plan Statements – From 1 year to permanently
Bank Records – From 1 year to permanently
Brokerage Statements – Until you sell the securities
Bills – From 1 year to permanently
Credit Card Receipts & Statements – From 45 days to 7 years (7 years for tax-related expenses)
Paycheck Stubs – 1 year
House/Condominium Records – From 6 years to permanently
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