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CPA Nerds has created a full library of financial calculators to help begin planning your financial future. From interactive calculations, dynamic graphs, to fully customizable reports, we’ve thought of everything!

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2018 Tax Rates

We know tax rates can be confusing, so we’ve provided an exhaustive list of tax rates from 2015 through 2018. We’ve detailed everything from filing as single to head of household, and even social security rates.

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Tax Record Retention Guide

As April 15th comes and goes again this year, the question remains: “How long do I need to store my tax records? This old shoe box is getting quite full!”

From W4’s to refund requests and old checks, what do we do with all of those documents? Federal law requires you to keep records of your tax returns and all supporting documents for three years. It’s conveniently called the “three-year law,” but this can be misleading.

Often, people throw away their documents after this three year mark – for good reason. However, if the IRL believes that you have misrepresented or underreported your income by 25% or more, you’ll be required to produce documents for up to six years if they come knockin’.

Keep in mind that if there’s any indication of tax fraud whatsoever, or if you do not file a return, you’ll be required to produce tax and other documents for as long as the IRS requests. There is no period of limitation.

To be safe, it’s smart to follow the guidelines we’ve outlined in this post, for both business and personal use, for you.

How long should I keep business documents?

1 Year

  • All correspondence with clients or vendors
  • Deposit slips & duplicate deposit slips
  • Purchase orders
  • Receiving sheets
  • Stockroom withdrawal forms
  • Requisitions

3 Years

  • General client and other correspondence (email threads are great for this)
  • Petty cash coughers
  • Internal audit reports & other internal reports
  • Inventory tags
  • Employee personnel records post-termination
  • Employee Applications
  • Insurance Policies/Expired Insurance Policies
  • Time cards
  • Savings bond registration records

6 Years

  • Accident reports & claims
  • AP ledgers & schedules
  • AR ledgers & schedules
  • Cancelled checks
  • Expired contracts & leases
  • Employment tax records
  • Bank statements & reconciliations
  • Expense analysis & distribution schedules
  • Expired option records
  • Inventories of products, materials & supplies
  • Invoices
  • Sales records
  • Subsidiary ledgers
  • Time books
  • Travel & entertainment records
  • Vouchers for payments to employees & vendors

What business records should I keep forever?

Federal law does not require you to keep any records forever. However, in some cases you’ll still want to keep these top 20 documents indefinitely:

  1. Audit reports from your CPAs or Accountants
  2. Cancelled checks for important payments, especially ones having to do with taxes
  3. Your cash book and complete chart of accounts
  4. Mortgages
  5. Property appraisals and records
  6. Retirement and pension records
  7. Trademark and patent registration information
  8. Bills of sale
  9. All contracts and leases that are still relevant or in effect
  10. Every corporate document including charter, by-laws, and documents of incorporation
  11. Any documents that substantiate fixed asset additions
  12. Deeds
  13. All depreciation schedules
  14. Year end financial statements
  15. General and private ledgers with year end trial balances
  16. All insurance records, accident reports, claims and policies
  17. Confirmations of investments or trade
  18. IRS revenue agent reports
  19. Legal records and journals
  20. All correspondence and anything you deem as an important matter

How long should I keep personal documents?

You should always keep your IRA contribution statements and year-end mutual fund information. However, you don’t need to keep your monthly or quarterly statements. Your year-end statements will suffice year to year.

3 Years

  • In case of an insurance dispute, keep medical bills
  • Expired insurance policies
  • Credit card statements
  • Utility records

6 Years

  • Tax related medical bills
  • All supporting documents for tax returns
  • Accident claims and reports
  • Sales receipts
  • Wage garnishments

Are there personal records I need to keep forever?

Indeed, there are personal records you should keep indefinitely. Here’s a list of the 6 top documents you should keep:

  1. All legal records
  2. Income tax returns & payment checks
  3. Property records and improvement receipts. Keep these for up to six years after you’ve sold the property.
  4. Investment trade confirmations
  5. CPA audit reports
  6. Retirement & pension records, such as your 1099-R, 8606, & 5448

Additional Records You Should Keep

In addition to the above business and personal records, you should also keep the following records:

  • Car records until you sell the car
  • Credit card receipts until you verify them on your statement
  • Insurance policies for the duration of the entire policy
  • Pay stubs and reconcile them with your W-2
  • Warranty sales receipts
  • Keep records of your bills until you verify the payment on your next bill
  • Depreciation schedules and any other capital asset records. You should keep these for three years after the tax life of each capital asset.
  • Mortgages, deeds, and leases. Keep these for six years beyond the agreement.

If you have any questions at all, please don’t hesitate to contact us at any time. We’re always here to help!

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