Document retention – what to save and for how long

If summer is a typically slower time for your organization, you may be tempted to clean out and purge un-needed items or documents. However, as a nonprofit organization, you need to be careful about what you throw away. Here are a few guidelines to help:

Always keep these documents:

  • Tax Returns
  • Audited financial statements
  • A copy of the application form (Form 1023) and the determination
    letter from the IRS recognizing your exempt status
  • Descriptions and summaries of your organization’s programs
  • Organizing documents, such as articles of incorporation and
    by-laws, with amendments
  • Minutes of meetings of the governing board and any standing
    committees, such as the executive or compensation committees
  • Asset records (acquisition and disposal details about buildings,
    furniture, investments)

Income and expense records

Keep income and expense records (for money received and spent from all sources – receipts, bank statements, invoices, journal entries etc.) for seven years from the date of the return or date the return was filed, whichever is later. During this period of time, the IRS can assess additional tax or penalties.

Employment tax records

Records of salaries, wages, taxes withheld and benefits paid should be kept for seven years.

For a complete list of document retention guidelines by line item, please see Record Retention Schedule.  

When you are able to dispose documents, remember to shred papers completely.