VSA’s Tax Record Retention Guide    

******VSA will keep our copies of client documents for 5 years******

Storing your copies of tax records: How long is long enough?

April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind you. 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 and this 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.

To be safe, we recommend that clients retain their original records according to the following:

Documents To Keep For One Year

• While it's important to keep year-end mutual fund and IRA contribution statements until 6 years after you sell an investment, you don't have to save monthly and quarterly statements once the year-end statement has arrived. 

Personal Documents To Keep For Three Years

• Credit Card Statements

• Medical Bills (in case of insurance disputes)

• Utility Records

• Expired Insurance Policies 

Documents To Keep For Six Years

• Cancelled checks and bank statements

• Supporting Documents For Tax Returns

• Accident Reports and Claims

• Medical Bills (if tax-related)

• Property Records / Improvement Receipts

• Sales Receipts

• Wage Garnishments

• Other Tax-Related Bills

Special Circumstances

• Legal Records (Forever – Trademark or Patent registrations, decrees, judgments, etc)

• Income Tax Returns (Forever - Only need the returns (not supporting documents)

• If you have an NOL or other carry-forward, you need to keep the full supporting documents for all returns from the creation of the NOL to 6 years after you use up the NOL)

• Documents supporting what you paid (basis) for anything you still own (6 years after you sell)

• Investment Trade Confirmations (only for 6 years after selling the investment)

• Retirement and Pension Records (up to 6 years after complete liquidation of the account)

• Car Records (keep until the car is sold)

• Credit Card Receipts (keep until verified on your statement or if supporting a business expense, then keep for 6 years)

• 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 6 years after property is 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 6 years after the tax life of the asset)