Paldino Company CPA - "Success Starts with a Handshake"

Welcome to my blog page the purpose of which is to provide you with timely and relevant tax and accounting information. I intend to bring you information which you can use now to assist you in lowering you income taxes. I will when appropriate give you links to tax related web-sites, worksheets and check-list to assist you in meeting you recording keeping requirements and provide you with the information you need to prepare an accurate return and pay the least amount of tax you are legally required to pay. Please check back often and feel free to post your questions and comments















Wednesday, November 3, 2010

How Long Should I Keep My Records?


Two of the most common questions that are asked on me are, 'What information do I keep?" and "How long should I keep it?"

Individual Taxpayers
Canceled checks do not prove an expense! Tax payers should keep invoices, paid receipts, credit card bills etc. to support their deductions.
As for how long... the statute of limitations is three years for personal income tax returns. My personal recommendation is to keep your personal records for five years to avoid all possible problems that might arise.  

Business Taxpayers
There is more information and paper that must be kept for a business and it does not all fit nicely under one time period.


Keep 1 Year
Bank deposit slips
Bank reconciliations
Purchase orders
receiving sheets
Stockroom withdrawal sheets.

Keep 2 Years
Voting proxies

Keep 3 Years
Insurance policies
Petty cash slips
Correspondence
Employment applications
Internal reports

Keep 5 Years
Internal audit reports
Computations for excise taxes

Keep 7 Years
Payroll records and documents
A/P and A/R ledgers
Customer invoices
Vendor invoices
Inventory records
Contracts and leases
Canceled checks
Sales records

Permanent Records
Deeds and mortgages
Cash ledgers
Credit history
Property appraisals
Major contracts and/or leases
Accountant's reports
Insurance records
Journals
Financial statements
Minute books, By-Laws and Certificate of Incorporation
Tax Returns
General Ledgers


The permanent records list is usually kept my most business, but it is the list under the number of years that confuses most businesses. To make life easier, (but maybe more cluttered) I suggest keeping everything for a period of seven years.

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