However, if your monthly statements aren’t serving any tax or other business purposes, you can consider shredding them after a year and keeping your detailed annual statements on hand for 7 years. Financial Recordsīank statements, credit card statements, canceled checks, paid invoices and other financial information quickly pile up.Īccountants typically will advise businesses to keep their bank account and credit statements for 7 years. Other key ownership and business documents should be kept permanently including deeds, titles, property records, and any contracts. If you’re a corporation, you’ll also need to keep any director or shareholder meeting minutes and a stock ledger. These include your company formation documents, such as articles of incorporation (for corporations) and articles of organization (for LLCs). ![]() There are certain documents that need to be kept indefinitely. Ownership Records and Other Key Business Documents If your company meets these requirements, you’ll need to keep all hiring records for each position for at least one year from the date of the hiring decision. For example, Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) all impact how you handle your hiring records if your business is over a certain size.įor Title VII and ADA, the requirements kick in when you have 15 or more employees it’s 20 or more employees for ADEA. In the US, there are several federal anti-discrimination laws that apply to recordkeeping and hiring. ![]() In addition, if an employee was injured on the job, you should keep any related records for up to ten years after worker’s compensation was paid. These records include anything like resumes, job applications and descriptions, performance reviews, and any employee files.Įxperts advise that you keep these documents for at least seven years after an employee leaves or is fired. In addition to employee tax information, you should keep all human resources files for any employee, current or former. Should Service Businesses Use COGS (Cost of Goods Sold)?.Are Your Business Records Safe in Case of a Disaster?.How Virtual Bookkeeping Helped Jennifer Save Time and Feel Confident During Tax Season.These records include timesheets, employee information, and benefit payments. If you have employees, the IRS recommends that you keep all employment tax records for at least four years from the time you paid the taxes or filed the return (whichever is later). You can read more about the IRS’ document requirements here. That’s why most accountants recommend that you hold on to your tax return and all supporting documentation for seven years from filing. The IRS also says that it can come after your business for failing to report income for up to 6 years after filing and for up to 7 years if you took a deduction on a bad debt. In the US, the IRS requires companies to keep their business tax returns for at least 3 years from the time of tax filing.īut don’t crank up the paper shredder on Year 3. ![]() You’ll need to hang onto your business tax returns and all supporting documentation until you can no longer be audited for that tax year. Your accountant or tax advisor may have different recommendations for your situation. Keep in mind that what follows is just general guidance, and not necessarily the final word. So I’ve got some advice for you about record-keeping. However, instead of stockpiling everything, it’s smarter to have an overall plan for keeping your records to make sure you keep the important stuff. Conventional wisdom when it comes to documentation is “better safe than sorry.” And outside of the tax world, there are few rules and little guidance on exactly what should be kept and for how long.
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