Record Retention

[Janitor Bob]

As a preparer, how long should I keep copies of client's tax returns? I just realized I now have 13 years of records

[ILLMAS]

Wow that is insane, way too many years, the CPA firm I used to work for would keep 5 years, the latest 3 years would be kept handy and the last 2 would be kept in the basement. I will be keeping 5 years on hand also, and planning on scanning every tax file with it's support and shredding the paper files.

[Margaret CPA in OH]

When I began my paperless journey, I had 13 years of files, too. That is now down to a single (well, multiple copies) dvd. The scanning was a significant undertaking and the shredding entailed an expense to a firm with documentation proving shredding but now I have a single file cabinet with a single folder for each client in case of paper documents being used during an engagement. Everything else is electronic.

I now have, thanks to advice from folks on this board, electronic faxes, too, which I can then save in the client files on my computer.

While this doesn't directly answer your question as to how long to retain documents, I was unwilling to simply discard - just in case - no matter what the reason. This was easier on me. I do know there are good reasons to NOT keep files beyond a certain time, but this was my choice. And it freed up an entire room in my home.

[michaelmars]

look at your state rules. in NY you are required to keep 7 years from filing date

[Diane]

Last year I cleaned out the attic. I had 261 pounds of paper. This consisted of my copies of returns dating back, in some cases, to the 1980's. Since I store this stuff in my attic I tend to forget about it. I hauled those 261 pounds of paper to the nearest shredder. This year I will be checking the rest of the tax storage in the attic.

Diane