Record retention is required by IRS both for businesses and individuals, yet it is sometimes neglected until documents are needed for an audit resulting in a last minute scramble. Thorough recordkeeping is also important for proof of purchases, proof of payment (check and credit card receipts), and documentation for personal purchases and tax basis of assets acquired.
Business Records 
Federal tax laws require taxpayers to maintain books of account or records to support amounts reported on tax returns. The general rule is that such books and records must be kept as long as they may be relevant to a taxpayer’s claim for a tax credit or refund or to an IRS attempt to assess additional tax for the year in question.
The specific rules relating to the length of time these books and records must be kept are quite detailed. However, we recommend the following general guidelines for document retention periods. In some cases, the retention period recommended may be for nontax reasons. For example, real estate records should be kept indefinitely for environmental liability exposure reasons.
Type of Record
Copies of tax returns as filed, tax and legal correspondence Forever
Audit reports, general ledger and journals, financial statements Forever
Contracts and leases, real estate records Forever
Corporate stock records and minutes Forever
Bank statements and deposit slips 6 Years*
Sales records and journals 6 Years*
Other records relating to revenue 6 Years*
Employee expense reports and records relating to travel and entertainment expenses 6 Years*
Employee payroll expense records 6 Years*
Checks 3 Years*
Paid vendor invoices 3 Years*
Inventory records 3 Years*
Depreciation schedules At least tax life of asset plus  3 years
Other capital asset records At least tax life of asset plus 3 years
Other records relating to expenses 3 Years*
Individual Records Retention Period
Type of Record
Wills, trust agreements, birth and death certificates, alimony, custody or prenuptial agreements, military papers, photos or video tape of valuables Forever
Home records, cancelled checks for improvement and maintenance Forever
Mortgage and loan payoff statements Forever
Bank statements and deposit slips 6 Years*
Cancelled checks both front and back, (if your bank does not return copies, you must print from your online banking or request from your bank monthly) 3 Years*
Online bill paying bank statement indicating payee, date paid and amounts  3 Years*
Paid invoices 3 Years*
Paid credit card bills and supporting receipts 3 Years*
Copies of tax returns as filed Forever
W-2, Forms 1099, 401(k)/IRA/Annuity Statements, Forms 1098, year-end broker statements, K-1s from Partnership and S Corporations 6 Years
Substantiation for charitable deductions, –less than $250 (cancelled checks) , written receipts, pay stubs – more than $250, as above, plus contemporaneous written acknowledgement, description of good donated, and statement of good or services received in exchange – more than $5,000, as above, plus written appraisal 6 Years
Please note, this compilation offers some guidance by providing a suggested time-frame to maintain records. It has been assimilated from several sources, including the basic IRS Regulation – 26 CFR 1. 6001-1, The Guide of Record Retention Requirements in the Code of Federal Regulations, as well as by reviewing and analyzing numerous record retention schedules. The suggested retention periods shown are not offered as final authority, but as guideposts against which to compare your needs. There may be several situations, for historical or reference purposes, that necessitate longer periods than legally required. 
*From the later of the tax return due date or filing date. (All records related to a return should be kept for at least six years if there is any concern the IRS could show a significant understatement of gross income on the return.)