One of the questions most frequently asked of tax professionals is “what tax records should I keep and how long should I keep them?”

 Here are some suggestions from the East Bay Association of Enrolled Agents,  based on federal laws and professional experience.  (Enrolled Agents are licensed by the federal government to assist taxpayers with tax planning, preparation and representation).

• Income tax returns and supporting documents should be kept at least four years from the due date of the return or the date filed, whichever is later.  Consider keeping returns indefinitely because without supporting documents, the returns do not take much space.

• Supporting documents such as bank statements, cancelled checks, credit card statements, deposit slips, charitable contribution receipts and medical bills may be discarded four years after the corresponding tax return was filed.
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• For retirement plan contributions, all records of  IRA deposits, employer-plan stock purchases, rollovers, conversions to Roth IRAs and Keogh plan deposits should be kept until four years after the plan assets have been withdrawn and the corresponding tax return filed.
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• Keep investment receipts for stocks, bonds and mutual funds for at least four years after the asset is sold and reported on a tax return.  Include records of stock dividends, splits and reinvested dividends.
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• For any rental real estate or depreciable business property,  keep records of date acquired, cost, improvements, and the depreciation claimed in previous years for at least four years after disposition of the property was reported on a tax return.
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• Some documents are so important they should be kept in a permanent file or safe deposit box.  These include deeds, title insurance policies, escrows, divorce and property settlement agreements as well as trust documents.