How long must documents be kept

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Grow Your Legal Practice. Meet the Editors. It all depends on the document and your business. Reasons for Retaining Business Records When you think about retaining records and documents, the first thing that probably comes to mind is an IRS audit.

Here are a few of them: Lenders whom you approach for financing might require income, sales history, and other documents. When you are negotiating with landlords, insurers, and other vendors, having a clear and written history of previous leases, insurance policies, and other contracts might strengthen your position.

If you decide to sell your business, potential buyers will want to review historical records as part of their due diligence. If you become involved in a dispute or lawsuit, you might need meeting minutes and written agreements to support your position.

Which Records Should You Keep? The records and documents that businesses should have if they need to address most situations include: business formation documents tax returns and supporting documents employment records sales receipts business asset records ledgers and registers leases or mortgage documents shareholder meeting minutes bank and credit card statements licenses and permits insurance policies and records, and loan documents.

If you don't file a return at all, the IRS can come after your business at any time. Employment tax records include: employees' names, addresses, social security numbers, dates of employment, and occupation wages, annuities, and pensions paid to employees with dates of payment taxes withheld including FICA and Medicare records of tips and fringe benefits paid if applicable to your business, and documents for independent contractors.

What About Electronic Records? Business Formation. Choosing a Business Structure. Sole Proprietorships. Forming a Corporation. See All Business Formation Articles. Talk to a Lawyer Need help? Start here. Practice Area Please select Zip Code. Show related content Don't show me this pop-up of the page I left off on again. You might also be interested in:. Skip to main content. My Priorities Search. Trending Building credit and keeping yours healthy How to build credit from scratch Building your credit with a secured credit card.

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Schedule an appointment. Advertising Practices We strive to provide you with information about products and services you might find interesting and useful. Your CPA, outsourced accounting service or tax attorney may recommend a different approach based on the rules of your industry and the specific needs of your business.

Blog Careers Login. Our Blog. Resources Blog. Author : Dennis Najjar. Comments: 0. In most cases, the IRS can audit you for three years after a filing, but that time period extends to six years if the IRS suspects you made a "substantial error" on your return.

Payroll tax records, including time sheets, wages, pension payments, tax deposits, benefits and tips must be kept for at least four years after the date the taxes fell due or the date you actually paid them, whichever is later.

Current employee files should be retained for at least seven years after an employee leaves, is terminated or retires. However, if an employee suffers a work-related accident or files a claim against the business, it's advisable to retain your records for up to 10 years after the claim is resolved.