Caution: Identity theft is a serious threat in today's world, and it is important to take every precaution to avoid it. After it is no longer necessary to retain your tax records, financial statements, or any other documents with your personal information, you must dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.
Business Documents To Keep For One Year
Correspondence with Customers and Vendors
Duplicate Deposit Slips
Purchase Orders (other than Purchasing Department copy)
Stockroom Withdrawal Forms
Business Documents To Keep For Three Years
Bank Statements and Reconciliations
Employee Personnel Records (after termination)
Expired Insurance Policies
Internal Audit Reports
Petty Cash Vouchers
Physical Inventory Tags
Savings Bond Registration Records of Employees
Time Cards For Hourly Employees
Business Documents To Keep For Six Years
Accident Reports, Claims
Accounts Payable Ledgers and Schedules
Accounts Receivable Ledgers and Schedules
Cancelled Stock and Bond Certificates
Employment Tax Records
Expense Analysis and Expense Distribution Schedules
Expired Contracts, Leases
Expired Option Records
Inventories of Products, Materials, Supplies
Invoices to Customers
Notes Receivable Ledgers, Schedules
Payroll Records and Summaries, including payment to pensioners
Plant Cost Ledgers
Purchasing Department Copies of Purchase Orders
Travel and Entertainment Records
Vouchers for Payments to Vendors, Employees, etc.
Voucher Register, Schedules
Business Records To Keep Forever
While federal guidelines do not require you to keep tax records "forever," in many cases there will be other reasons you'll want to retain these documents indefinitely.
Audit Reports from CPAs/Accountants
Cancelled Checks for Important Payments (especially tax payments)
Cash Books, Charts of Accounts
Contracts, Leases Currently in Effect
Corporate Documents (incorporation, charter, by-laws, etc.)
Documents substantiating fixed asset additions
Financial Statements (Year End)
General and Private Ledgers, Year End Trial Balances
Insurance Records, Current Accident Reports, Claims, Policies
Investment Trade Confirmations
IRS Revenue Agents' Reports
Legal Records, Correspondence and Other Important Matters
Minutes Books of Directors and Stockholders
Mortgages, Bills of Sale
Property Appraisals by Outside Appraisers
Retirement and Pension Records
Tax Returns and Worksheets
Trademark and Patent Registrations
Standard deduction increased:
$13,850 for single filers,
$20,800 for heads of household, and
$27,700 for joint filers in 2023.
Alimony is nondeductible to the payer and tax free to the recipient after 2018.
Child Tax Credits doubled to $2,000 for each qualified child.
Personal exemptions are discontinued (2018-25).
Miscellaneous itemized deductions are suspended.
Un-reimbursed employee expense deductions removed.
Medical expenses deduction are cut back to 7.5% AGI (2017-18).
Above the line charitable contribution deduction removed.
Mortgage interest deduction limited to the first $750,000 in principal value.
State and local tax deduction limited to a combined $10,000 for income, sales, and property taxes.
Cancelation of Debt (COD) exclusion for personal residence removed so is fully taxable.
Standard mileage rates
Moving 0.22 (military only)
Corp AMT abolished
All C corps have a single tax rate of 21% effective in 2018
Taxes paid or accrued in carrying on a trade or business are not limited.
Allows full and immediate expensing of short-lived capital investments for five years.
Increases the section 179 expensing cap from $500,000 to $1 million.
Establishes a 20 percent deduction of qualified business income from certain pass-through
How did the tax law change?
Business Records To Keep... Personal Records To Keep...
1 Year 1 Year
3 Years 3 Years
6 Years 6 Years
What is an "Enrolled Agent"?
An Enrolled Agent (EA) is an individual who has demonstrated technical competence in the field of taxation. Enrolled Agents, or EAs, can represent taxpayers before all administrative levels of the Internal Revenue Service. IRS administrative levels include examination (audit), appeals, and collections. "Enrolled" means EAs are licensed by the federal government. "Agent" means EAs are authorized to appear in place of the taxpayer at the Internal Revenue Service. Only EAs, attorneys, and CPAs may represent taxpayers before the administrative levels of the IRS.
Storing tax records: How long is long enough?
April 15 has come and gone and another year of tax forms and shoe boxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?
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 under-reported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following