File Retention

File Retention Guidelines

Proper record-keeping is essential for managing your tax obligations and ensuring compliance with IRS regulations.

Here are some general guidelines for how long you should retain various source documents related to your tax returns:

• Income Records: Keep records of income, such as W-2 forms, 1099 forms, bank statements, brokerage statements, and other documents that show income for at least 3 years.
• Expense Records: Retain receipts, invoices, and other documentation for deductible expenses for at least 3 years. This includes business expenses, medical expenses, and charitable contributions.
• Property Records: Maintain records related to property, such as purchase and sale documents, receipts for improvements, and records of depreciation, for as long as you own the property plus 3 years after you dispose of it.
• Investment Records: Keep records of investment purchases and sales, including stock and mutual fund statements, for at least 3 years after you report the sale on your tax return.
• Retirement Account Records: Retain records of contributions to and distributions from retirement accounts, such as IRAs and 401(k)s, for at least 3 years after the account is closed.
• Home Purchase and Improvement Records: Keep documents related to the purchase and improvement of your home, including closing statements, purchase contracts, and receipts for improvements, for as long as you own the home plus 3 years after you sell it.
• Health Insurance Records: Maintain records of health insurance coverage, including Form 1095-A, for at least 3 years.
• Business Records: For business owners, retain records of income, expenses, and assets for at least 3 years. This includes receipts, invoices, bank statements, and payroll records.