Record Retention
Federal tax laws require taxpayers to maintain the books and records needed to support amounts reported on federal tax returns. These days, many taxpayers keep some or all of their financial and tax records in an electronic (computerized) format. The IRS recently issued new guidelines for such computerized records. The federal government can potentially seek civil and criminal penalties if these guidelines are not followed. The specific rules relating to the period records must be kept are quite detailed; however, as a general guideline, we recommend the record retention periods listed below. In some cases, the recommendation may be for non-tax reasons; for example for environmental liability exposure reasons keep real estate records forever.
| Individual Records | Retention Period |
|---|---|
| Tax return copies | 6 years after filing |
| Medical bills | 6 years after payment |
| Forms W-2, 1099, etc. | 6 years after receipt |
| IRA records (deductible & nondeductible) | 6 years after IRA termination |
| Loan records | 6 years after loan payoff |
| Insurance policies | 6 years after expiration |
| Major purchase receipts | 6 years after purchase |
| Year-end brokerage statements | 6 years after securities disposition |
| Certificates of deposits statements | 6 years after maturity |
| Home records (cancelled checks for purchases, major improvements and maintenance) |
Permanent |
| Birth and death certificates | Permanent |
| Medical records | Permanent |
| Wills | Permanent |
| Trust agreements | Permanent |
| Detailed list of financial assets held | Permanent |
| Military papers | Permanent |
| Photos or videotape of valuables | Permanent |
Notes: Documents establishing basis of trade, business or investment assets, or taxpayers’
principal residence should be retained for six years beyond the date of filing of tax return
for the year in which the asset was disposed.
