Storing 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 underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists.To be safe, use the following guidelines.
Business Records to Keep
Personal Records to Keep
> Car Records (keep until the car is sold)
> Credit Card Receipts (keep with your credit card statement)
> Insurance Policies (keep for the life of the policy)
> Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
> Pay Stubs (keep until reconciled with your W-2)
> Property Records / improvement receipts (keep until property sold)
> Sales Receipts (keep for life of the warranty)
> Stock and Bond Records (keep for 6 years beyond selling)
> Warranties and Instructions (keep for the life of the product)
> Other Bills (keep until payment is verified on the next bill)
> Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)