SR Glossary: Document Retention
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We all seem to be inundated with documents. They start piling up and we do not know which ones we should keep for documentation purposes and how long should we keep them.
There are several types of documents typically generated by a business. Some types are: invoices, receipts, and bank statements. As a general rule, you should retain documents that relate to your income tax return for at least four years after the date that the return was filed. This does not apply if fraud is involved; there is no statute of limitations in cases of fraud.
The records should be stored in a safe and a dry place. Should you have an audit, it is your responsibility to produce the documents requested by the agent to support the item in question. If the documents are destroyed, the government most likely will not allow a deduction if you cannot provide proof in document form.