Per the IRS Statue of Limitations, copies of tax returns and supporting documents should be kept for 3 years after the later of the due date of the return or 3 years after the date the return was actually filed.
Tax documents include support for all income (W-2’s, 1099’s for interest/dividends, etc.), deductions (receipts for charitable contributions, medical expenses, business expenses, etc.) or credits (tuition expenses paid for your child/dependent).
There are some exceptions for holding onto tax documents longer than 3 years depending on various tax situations that may apply to you and or your business. Prior to disposing of tax records you should consult with your accountant if you have any questions.
Currently there is no set requirement for holding onto your audit or review documents. A Company’s internal retention policy usually drives how long the Company will hold onto all financial statements or letters that are issued with the audit, review or compilation. A suggested practice would be to permanently maintain these documents. They should be readily available in case they are requested in a new banking situation or if a valuation is being performed on your business if you’re looking to sell your Company. It is common practice for your accountant, who performed the audit, review or compilation to hold onto these documents for a minimum of 7 years.
If you have any further questions regarding record retention please contact Joseph Manolas, jmanolas@meadenmoore.com.