How long should you keep records

We get many calls regarding retaining records. Based on Federal laws, we recommend: 

Income Tax Returns and Supporting Documents—Keep 4 years and preferably 6 if space is not critical. Once this period has elapsed, the documents can be discarded; the tax returns themselves, which do not take much space, should probably be retained indefinitely. 

Residential Property Records—All escrow statements (purchase and sale), refinance papers and receipts for improvements should be kept for 4 years after the property is sold. 

Purchase Receipts for Stocks, Bonds, or Mutual Funds—Should be kept for 4 years after the asset is sold. Include record of stock dividends, splits and reinvested dividends. 

Depreciation Records—Keep records of the property’s cost, date acquired, and schedule of depreciation for any rental real estate or depreciable business property you own. This information is on your tax returns; the actual documents, however, should be kept until 4 years after the disposition of the property. 

Retirement Plan Contributions—Records of non-deductible IRA deposits, employer plan stock purchased, rollovers, and Keough plan deposits should be kept until 4 years after the plan assets have been withdrawn. 

Personal Records—Important papers such as estate and gift returns, divorce and property settlement agreements, deeds, title insurance policies, and all trust documents should be kept in a permanent file, or perhaps a safe-deposit box. 

Miscellaneous Papers—Bank statements, canceled checks, credit card statement, deposits slips, charitable contributions receipts, and medical bills can be discarded after 4 years. 

Remember—When in doubt, DON’T throw it out; call or e-mail us if you have a question. 

 Donna J. Bradbury, CPA (818) 990-6363

donna@eagleaccountingservice.com