Keep your home office tidy with this guide on paper organization.
Store Records Electronically
It is a smart idea to scan, copy, and convert paper documents into a digital format. You can save these documents on a hard drive or in a secure cloud company. This allows you to save important documents and access them remotely in case of a natural disaster or emergency.
Prevent Identity Theft
Dispose of old tax documents, statements, or any papers with personal information by shredding. Do not simply toss in the trash. Although identity theft mostly takes place online these days, it is best to be extra cautious.
How long do I keep my tax records?
4 years from the due date of the return, or the date the return is filed.
6 years if you want to be extra safe. If the IRS suspects an underreported income (25%+) or indications of fraud, an audit may go back six years.
If I own a business, how long do I keep receipts?
4 years unless the California Department of Tax and Fee Administration gives written authorization for earlier disposal. This includes all records involving sales or use tax liability.
Should I keep divorce papers?
It is in your best interest to retain any and all documents related to your divorce, forever.
Personal Documents to Keep
One year
- Pay checks
- Cancelled checks
Three years
- Medical bills
- Expired insurance policies
Six years
- Supporting documents for tax returns
- Accident claims and reports
- Tax related medical bills/bills
- Sales receipts
- Property records/improvement receipts
- Mortgages, deeds, lease documents
Forever
- CPA reports
- Legal documents
- Income pay checks
- Income tax returns
- Investment trade records
- Retirement records
Special Circumstances
- Car records (as long as you own the car)
- Stock and bond records (6 years beyond selling)
- Warranties and manuals (only keep if you still have the product)
- Depreciation schedules and capital asset records (3 years after the tax life of the asset)
Personal Documents to Digitize
If you haven’t already, please opt-in to paperless settings. Typically, these papers end up compiling in piles causing more stress than good. You should be able to access all of your statements online, where the data is aggregated together.
- Bank statements
- Credit Card statements
- Retirement contribution statements
- Utility bills
Business Documents to Keep
One year
- Purchase orders
- Deposit slips
- Requisitions
- Receiving sheets
Three years
- Employee applications
- Employee records (after termination)
- Employee time cards
- Internal reports
- Inventory log
- Expired insurance policies
Six years
- Accident claims/reports
- Employee tax records
- Expired contracts/leases
- Inventory logs
- Payroll records
- Purchase orders
- Sales records
- Vouchers
- Travel/entertainment records
Forever
- Audit reports
- Cancelled checks (tax payments)
- Contracts
- Leases
- Deeds
- Depreciation schedules
- Investment trade confirmations
- IRS reports
- Legal records/correspondence
- Mortgages, bills of sale
- Property records
- Retirement records
- Tax returns
- Trademark/patent registration
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The information here is sourced from the Franchise Tax Board, California Tax Service Center, and CPA Rod.
