"Shred with a Purpose"
Saturday, September 27, 2014
10 am until Noon
Hook Law Center's Virginia Beach Office
295 Bendix Road, Virginia Beach, VA 23452
GUEST ARTICLE
To Shred or Not to Shred?
By Sarah J. Schmidt
2nd Year Law Student - Regent University School of Law
Intern - Hook Law Center, P.C.
Fall is among us and with colder weather fast approaching; we will soon be spending more time
inside. What better time to clean out your closets and file cabinets?
Hook Law Center has a solution for you! Head to our free Shred Day event to support the
Alzheimer Association on Saturday, September 27, 2014, and we will assist you in securely destroying
your documentation. With that in mind, how long should you keep those important documents?
Federal Taxes
Typically, you should keep your federal income tax returns and supporting documentation for at
least seven years. The Internal Revenue Service provides that “[t]he length of time you should keep a
document depends on the action, expense, or event the document records. Generally, you must keep your
records that support an item of income or deductions on a tax return until the period of limitations for that
return runs out. The period of limitations is the period of time in which you can amend your tax return to
claim a credit or refund, or that the IRS can assess additional tax.” The IRS has several different periods
of limitation. Most significantly, if you have ever failed to file a tax return or have ever filed a fraudulent
return, you should keep records indefinitely.
However, the IRS has assigned other scenarios (such as failure to report income or failure to
claim a credit or refund) varying periods of limitation, ranging from two to seven years. To err on the side
of caution, best practice is to keep your records for the longest period of limitation recommended by the
IRS. Therefore, consider keeping your federal income tax returns and supporting records for at least seven
years from either the due date of the return or the date the return was filed, whichever is later.
Virginia Taxes
You should keep your Virginia tax returns and supporting documentation for the same length of
time, at least seven years. The Virginia Department of Taxation recommends keeping your records for
three years from either the due date of the return or the date the return was filed (whichever is later)
unless the Internal Revenue Service suggests otherwise. Therefore, keep all of your tax records for the
same length of time, seven years.
Contracts
How long you should keep a contract and supporting documentation varies. At a minimum, you
should keep a contract for the length of time that you (or the other party) could file a lawsuit. This
length of time is determined by the terms of your contract and the laws in your state. While the terms of
your contract may control this length of time, each state law provides a “statue of limitations” as well. A
statute of limitations is a law that bars a party from filing a claim after a specified period of time. Because
a court can find that an express clause in your contract is unreasonable, you should keep your records for
To Shred or Not to Shred?
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"Shred with a Purpose"
Saturday, September 27, 2014
10 am until Noon
Hook Law Center's Virginia Beach Office
295 Bendix Road, Virginia Beach, VA 23452
GUEST ARTICLE
the length of the statute of limitations in your state. Once the period of time specified in the statute of
limitations has passed, you (and the other party) are barred from filling a claim.
In Virginia, the statute of limitations for a contract also depends on the type of contract. In
general, the statute of limitations for a written contract is five years and for an oral contract, it is three
years. See Va. Code § 8.01-246 for exceptions.
Credit Card and Bank Statements
According to the FDIC Consumer News keep your bank and credit card statements for a period of
one year; unless they have any tax significance (in which case, keep them for seven years).
Investment Accounts
Keep investment account statements for the life of your investment, plus seven years for tax
purposes. This should provide you with basic guidelines from various sources to help you trim your file
cabinet. However, opinions vary on the exact dates for retaining records and when in doubt, always err on
the side of caution. Moreover, there are many important documents not mentioned above that should be
kept indefinitely. If you have any questions or concerns, please feel free to call the Hook Law Center,
P.C. and we will be happy to assist you.
To Shred or Not to Shred?
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