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How long must these records clog up my house and my storage? It is an important question as many are concerned about identity theft and security of their records as well as legal issues. It is more than a good idea to put your records on a written schedule of when to shred or destroy them or to plan on retaining them permanently when needed. Some items do need to be kept permanently and you need to be aware of when that may apply to you (more details below). For more thorough answers, legal advice is recommended. You can search the internet under "record retention guidelines" or other search terms to find some additional guidance or samples that might be more specific or a better guide than my general description below.
A good link that I found is: http://www.cpadirect.net/cpadirectmarketing/When_Can_I_Throw_Documents_Out.pdf
The IRS explanation is at: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records
What should you keep permanently? Tax return copies and worksheets (electronic or paper versions) and correspondence that proves the government entity received the return. This helps to prove that you filed returns if the government loses their records or a mistake was made by the government employee that put the information in their system. Deeds, mortgages, bills of sale, proof of payments and records on anything you currently own will help to document the cost or other tax basis and keep you from paying additional tax if you did not have them. This can include construction records, home improvements, and leasehold improvements. Retain cancelled checks on important payments for taxes, assets and important contractual payments, even leases. Keep correspondence on legal and important matters as well as retirement, pension and union agreements for a business. Business financial statements, year-end trial balance records or general ledger ending balances (an annual electronic backup of these records, especially if not printed) should be kept.
Keep permanently any audit reports from government authorities as well as tax related correspondence. Insurance policies, employee benefit plans and business training manuals when you have hired others are important to keep. Property appraisals should be retained. Corporate minute books, business licenses, contracts, insurance records, accident reports, claims and policies are another set of records to keep. Corporations also need to retain their shareholder records and transactions. If you make special tax elections like LIFO inventory, you may need to keep some details permanently. Patents and trademarks are items that can be valuable to retain as you may find you need them later.
Many other records should be kept 7 years including general cancelled checks (remember to keep important ones like real estate transactions or other assets you still own); bank statements; statements indicating tax withheld (like W-2); sales, invoicing and purchasing records for business (including rental property) transactions; business payroll records and taxes; notes receivable ledgers and schedules after payoff; general ledger transaction detail, accounts receivable, payable, inventory schedules and reports; as well as settled cases for accident reports and claims. These are items that you really may need if someone or the government attempts to prove fraud against you. Some records are needed for this long after you file your tax return. So if you did not file a particular tax year timely, you should extend the time for keeping those records for 7 years after you file.
There are other records that you need for 4 years or less that are really just generally needed, if at all, for your burden of proof against another party. These include bank reconciliations, general or routine correspondence, deposit slips, employment applications and expired insurance policies.
Some items can be kept for shorter periods of time. For important legal items it can be beneficial to have legal quidance as sometimes there are legal advantages to following your written guidelines. Some immaterial items that do not save you any tax deductions might also qualify for earlier destruction. Otherwise, it is usually better to error on the side of caution and retain until at least your next regular time for destruction per your policy.
Employers really do need to have their policies in writing for a wide range of issues including acceptable use of e-mail in the business. There are "business-critical" e-mails that should be retained and separated from "non-essential messages" that can be purged from the system. You need to go to the trouble to define an "e-mail business record" for your business. Additional research and legal advice is recommended if this applies to you.
This list is not meant to be all inclusive or as legal advice, but to give you some helpful general categories of time so that you can begin to separate out your records and destroy the items that are not needed for any future reason.