How Long One Must Keep the Business Records
by Harley Green AccountantIt is
known to all that keeping the business records is important to prepare tax
billings. The records include receipts, invoices, canceled checks, payroll
records, employee details, bank statement and other important things as an accountant Venice mentioned.
But, the question is how long one should keep these records? With
computerized systems, it is easy to keep records forever. However, what about
the physical records? The current post is all about these important topics. The
post will mention which records need to be kept for how long?
Business Tax Returns
Unless IRS is auditing your tax return, it is important to keep
these records safe. Mostly, IRS can audit you for three years after a return
file. However, in case you fail to report return or take a deduction on a bad
debt or consecutive years, it may possible that IRC can audit you even after
6years or 7years. Therefore, most of the accountants advise you to keep the
documentation at least for the next 7years to 8years. It will help you deal
with any issues.
Payroll Records
Before talking about how long you should keep the records, you
must know what the records you need to keep. The documents include timesheets,
wages, pension payments, tax deposits, benefits, and tips. It is advised that
one must keep these records at least for the next four years. No matter, you
hire or fire employees in between, you must keep these employees.
Employee Records
It is not about only the payroll records that you must keep with
you. Additionally, you must also keep the records of your employees even after
they leave, retire, or deceased. An accountant
Venice mentioned that these records
must include things such as resumes, job applications, and performance reviews.
In case an employee suffers an accident during the work and claims compensation
for it, you should keep the records for at least the next 10years even after
the claim is resolved.
Ownership records and other important documents
One of the most important documents that you must keep with
yourself is ownership records. These records include the company formation
documents, such as articles of incorporation (for corporations) and articles of
organization (for LLCs). In case you have formed a corporation, then you need
to keep the records such as stock ledger, director or shareholder meeting
minutes, etc. Other important things such as deeds, titles, property records
and contracts must also be kept for lifelong. These are some important
documents that may have been needed at any point in time.
Financial Records
Finally, the most important financial records that you need to
keep yourself with. These records include documents like credit statements,
canceled checks, paid invoices, and other important things. All the accountants
advise keeping these records for at least 7years to 8years.
Final Words
With the new digitalized system, keeping records is not very
difficult. In many places, IRS also prefers digitalized content over the papers
as it stays in a more perfect condition over others as an accountant Venice mentioned.
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Created on Dec 10th 2019 05:49. Viewed 261 times.