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Record Retention: How Long is Long Enough?
Record Retention: How Long is Long Enough?
November 21, 2016 - COPS Paper Shredding

 

Whether you're completing a year-end organization project, or starting to spring clean, that usually entails clearing out the storage cabinets. When confidential documents are encountered during this process, that leads to a common question... "Which records can be disposed, and which records should be retained?"

 

Please note: The suggested retention periods are not offered as final authority, but simply as guidelines. Please confirm with your attorney, accountant, and state/local government retention requirements prior to destruction.

 

Document Retention Law

The Internal Revenue Service governs the time period for which individuals need to keep their records. The time period varies depending on the kind of records and their purpose. Before discarding any documents, determine whether the IRS, a creditor, or an insurance company might require the retention of the documents.

Time Frame

In general, an individual should keep most documents for three years at a minimum. Exceptions to this rule include: if the individual failed to report income that he should have reported, especially if it exceeds 25 percent of his gross income reported on the tax return; if the individual did not file a tax return; or if the individual filed a fraudulent tax return. In the first case, the individual should keep his records for an additional six years. In the second and third cases, the individual should retain his records indefinitely.

Claim for Credit or Refund

An individual filing a claim for credit or a refund should retain his records for three years after the date he filed his original return, or two years after the date he paid the required tax. He should follow the rule for whichever date comes later.

Worthless Securities or Bad Debt

If an individual files a claim from a worthless securities loss, or for a deduction from bad debt, he should retain those records for a minimum of seven years.

Employment Records

Individuals should retain all employment records for a minimum of four years from the date the tax was due or paid, and keep the records from whichever date is later.

Expert Insight

Do not automatically discard records that the IRS no longer requires, and check with your insurance company or creditors to see if either require the records for other purposes.

As always, COPS Paper Shredding is here to help you take care of documents that need to be shredded with a proven secure destruction method. If you have any questions about what should be shredded, or if you want to schedule your next shred project, give us a call at (309) 452-0064 Ext. 104!

Our Customer Service team is also happy to assist you via email. We're only a few key stokes away at customerservice@cops-shred.com.