Retention period

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The retention period of a document is how long that document should be kept. At the termination of the retention period, the document is usually destroyed. The term is generally used by accountants and tax professionals whose occupation involves dealing with legal documents that only need to remain in existence for a certain amount of time. The retention period varies for different types of records. For example, business incorporation documents have a permanent retention period (meaning that they should never be destroyed), but receipts for tax-deductible purchases by an individual taxpayer usually have a three-year retention period (and can often be safely discarded after that point.) The length of the retention period is based on the likelihood that the document will be needed at some point in the future. Records that will serve no further purpose (as determined by the length of their retention period) are destroyed for space issues, usually by paper shredders.