How Long One Must Keep the Business Records

It 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 257 times.

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