Here are some guidelines to help you decide what to hang on to and what to throw out. Keep the following records for the amount of time indicated:

Permanently

• Federal and state income tax returns and proof of their mailing, including all documents that you sent to the IRS when you filed, W-2s and records of securities purchased.
• Sales and purchase agreements for capital items, such as land, buildings and equipment.

7 Years

• Cancelled checks, deposit statements and receipts. Records for transactions that have an impact on a particular year, such as receipts for itemized deductions or interest income.

6 Years

• IRA and other retirement plan documents, including plan statements and cancelled checks, withholding statements and annual tax reports.
• IRA and retirement plan contributions. That includes statements and records of contributions. You need to support their tax-exempt status upon withdrawal.

3 Years

• Information needed to prepare tax returns, such as records of sales receipts and operating expenses.
• Receipts of escrow statements, including purchases and sales.
• Car and truck expense documents for your business
• Meal, entertainment and travel receipts for your business, too.

Excerpt from T. Rowe Price Investor, September 2001 and IRS Publication 552, What Records to Keep During Tax Time at www.irs.ustreas.gov.

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