Whether you’re an entrepreneur, a freelancer, or just managing your personal finances, knowing how long to keep your tax and financial records can save you time, space, and headaches. With the IRS, insurance companies, and financial institutions all having their own requirements, it’s important to have a clear plan for retaining (and safely disposing of) your documents.
Below are the recommended timelines for keeping business and personal records, as well as tips to store them securely.
Business Record Retention Guidelines
| How Long To Keep Records | Record Type |
| 1 Year | Customer/vendor correspondence, duplicate deposit slips, purchase orders (non-official copies), receiving sheets, requisitions, stockroom withdrawal forms |
| 3 Years | Terminated employee files, expired insurance policies, internal reports, general correspondence, petty cash vouchers, time cards |
| 6+ Years | Bank statements, reconciliations, cancelled checks, payroll records, invoices, sales records, expense reports, purchasing copies, travel records |
| Forever | Corporate documents, important contracts, deeds, tax returns, financial statements, legal records, depreciation schedules, property records |
Note: For records related to bad debt deductions or losses on worthless securities, keep for 7 years.
Individual Records Retention Guidelines
| How Long To Keep Records | Record Type |
| 1 Year | Bank statements, paycheck stubs (after W-2 reconciliation), canceled checks, monthly retirement statements |
| 3 Years | Credit card statements, utility bills, medical bills (insurance disputes), expired insurance policies |
| 6+ Years | Tax supporting documents, property and improvement receipts, wage garnishments, sales receipts, tax-related medical bills |
| Forever | Audit reports, legal records, important correspondence, tax returns, investment confirmations, retirement/pension records |
Note: As above, for records related to bad debt deductions or losses on worthless securities, keep for 7 years.
Best Practices for Storing and Backing Up Records
Go Digital
- Scan paper documents (like bank statements, tax returns, and insurance policies) and save as PDFs.
- Use external hard drives, encrypted USBs, or cloud storage services as backup.
- Many banks and financial services now offer e-statements, making it even easier.
Consider Off-Site or Cloud Backup
- Cloud or online backup ensures your records are protected even if a natural disaster strikes your home or office.
- Choose reputable providers with strong encryption.
Safe Disposal
Don’t just toss old records in the trash!
Safeguard against identity theft by shredding any documents containing personal or financial information once you no longer need them.
Special Circumstances & Exemptions
- Car records: Keep until you sell the vehicle.
- Insurance policies: Retain for the life of the policy.
- Property records: Maintain until the property is sold (and then for several years after).
- Sales receipts: Hold onto for the duration of a warranty.
- Depreciation schedules and capital asset records: Keep for at least three years after the asset’s tax life has ended.
Quick Reference Table
| Document Type | Minimum Retention |
| Tax Returns | Forever |
| Bank Statements | 1 Year (longer if-tax related) |
| Payroll Records (Business) | 6 Years |
| Legal Documents | Forever |
| Investment Confirmations | Forever |
| Receipts (warranty items) | Life of Warranty |
Final Thoughts
Taking the time to organize, digitize, and securely store your financial records will help you stay compliant, prepared, and protected.
And when it’s time to dispose of these records, shred them—don’t just throw them away!
If you’re unsure about a document, SBDP can help you determine how long you should store it.
IRS Recordkeeping Guidelines
Information summarized from provided materials and industry best practices. For more on IRS recommendations, see: IRS Recordkeeping Guidelines