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Record Retention Guidelines…..Tax Tip of the Week | No. 143 April 25, 2012

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , trackback

“How Long Do I Keep This Stuff?”

Now that you have filed your tax returns you may be wondering how long to retain the returns and the source documents. The Ohio Society of CPAs offers these guidelines for tax records and other important documents:

Copies of Tax Returns – Seven years.  You have seven years to go back and make a claim for a “worthless security”.  You will also need the returns and supporting documentation in the case of an audit.  Most audits will be conducted within three – six years of the filing date.  Note:  In the event you generate a Net Operating Loss (NOL) tax return copies need to be kept for up to 20 years.  An NOL can be carried forward for up to 20 years.

Cancelled Checks – If the cancelled check relates to supporting your tax return, then it should be included in your tax file for the periods discussed above.  Otherwise, cancelled checks and bank statements should be kept for three years.  It is advised that self-employed individuals should retain these records for six years.

Year-end Mutual Funds and Brokerage Statements – Three years.  Unless the statements are needed longer in order to establish your cost basis in the investment.

Loan Documents – Shred them when you pay off the loan and receive the title or deed.

Big Ticket Items – A special insurance file should be established to hold receipts of items such as, jewelry, rugs, appliances, antiques, cars, collectibles, furniture etc.  These will be needed to support your insurance claim in the event of a loss or damage.

Major Home Improvements – Receipts of major home improvements should be kept for as long as you own your home.  They may be needed for warranty purposes and allows you to show potential buyers how much you have invested in your home.

Keep Forever Documents – The following documents will be needed throughout your life time:

– Retirement documents.  Including your IRA contribution records.
– Stock and mutual fund purchases should be kept of as long as you hold that investment.
– Life Insurance policies should be kept until the policy terms are fulfilled.  Make sure your heirs know where to find policies that pay at the time of your death!
– Defined benefit pension plan documents should be kept even after you retire.
– Wills, Powers of Attorney, trust documents and similar documents will be needed to administer your estate.  Again, make sure your heirs know where to find these documents!

Hopefully these guidelines let you know what clutter in your home can now be shredded. 

As always, give us a call if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

Tax Tip of the Week Video Series:


…until next week.



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