How Long Do I Keep Financial Records
Presented by the National Association of Federal Credit Unions, an independent trade association representing federally chartered credit unions nationwide. Copyright 1998.
Deciding which records to keep and for how long can be a confusing process, one that leads too many of us to keep everything "just to be safe." Despite the revolution in online services and availability of high-tech information storage and retrieval, paper documentation is still the standard.
Keeping records for tax purposes
The IRS has three years to audit your federal tax returns for any reason, with the following exceptions:
The IRS has six years to collect tax or initiate legal action if 25% or more of gross income is not reported. There is no time limit in the case of fraudulent or never-filed returns. Any documents used to complete or support a tax return should always be readily available. They may be the evidence you need to save yourself an audit. Canceled checks that correspond to entries on your tax returns should be saved, as should medical bills, for three years to substantiate canceled checks. Weekly and monthly salary statements can be discarded provided your annual W-2 form reflects the correct information.
In your safe deposit box
- Automobile title and lien release: Save until vehicle is sold or traded.
- Credit or installment records: Keep until debt is paid or as needed.
- Will and/or trust documents: Keep indefinitely or as needed.
- Property ownership documents: Keep until property is sold, then keep a copy of the purchase and sale agreements indefinitely.
- Investments: Keep until sold, maturity and/or redemption.
- Important records (copies of things you will need in the event that your house is robbed, damaged or destroyed): Inventory of valuable property with photographs, purchase prices and/or receipts; inventory of insurance policies and brokers; inventory of bank accounts and other investments; pension records; credit card records, etc.
In your home filesAutomobile:
- Payment book: Keep until your car is paid in full.
- Repair records, receipts for parts and record of gasoline purchases: Keep until car is sold or traded.
- Car used for business purposes: Keep and store records to substantiate business use with tax return. Keep purchase and sales agreement for six years after car is sold or traded.
- Passbook: Keep until account is closed.
- Statements, check registers and canceled checks: Keep for three years. Store checks substantiating tax-related deductions with tax returns.
- Cash receipts for major purchases: Keep until item is sold or discarded if the item is included on your household inventory.
- Current bills, charge slips: Keep one year for general purposes and indefinitely if used to provide legal evidence as proof of purchase. Store with tax return if needed to substantiate a tax-deductible item.
- Credit card records: List of credit card account numbers, creditors' phone numbers and addresses. Keep until cards expire or are destroyed or account is closed.
- Education/Employment information: Personal benefits reports and other information should be kept only as needed. Pension records from any prior employer should be kept indefinitely
- Copy of will and/or trust documents: Keep indefinitely or as needed.
- Guarantees and warranties: Attach purchase receipts. Annually remove expired warranties and guarantees. Throw away instruction manuals when item is sold or discarded.
- Home improvement receipts, record of land transfer taxes and list of purchase price, closing costs and selling costs: For tax purposes, keep all records and receipts until the end of the third year following the year in which you sold the home.
- Termite inspection policy: Keep until the property is sold.
- Rented property: Copy of lease or rental agreement and pictures showing move-in condition of rental property. Keep until you move and claims are settled.
- Policies and other information: Keep list of all policies and related information. Update as necessary.
- Car: Record of traffic violations or accidents. Keep for six years after violation.
- Health: Medical history. Update as necessary.
- Property: Personal property inventory including original purchase price and photos of each room showing especially valuable or unusual possessions.
- Record of mutual fund, stock and bond statements and certificates: Update as necessary for tax purposes.
- Transaction receipts: For tax purposes, keep until third year after the asset is sold.
- Paycheck stubs: Discard annually after checking against W-2 totals.
- Receipts for tax-deductible items and investment statements: Use annually, then store with tax returns.
- Inventory of safe-deposit box: Keep indefinitely and update if contents change.
- Loan statements and payment books: Keep until at least the end of the tax year in which the loan is paid off or as needed.
Business Travel Log
Receipts for tolls, taxis, parking fees, gas and maintenance, tips and miscellaneous, auto rental and transportation tickets: Use annually, then store with tax returns.
In Your Share Draft Register
Items such as charitable contributions or miscellaneous expenses (including professional association and union dues, tax return preparation costs, financial publication subscriptions, etc): Use annually then store with tax returns.