How Long Should Documents Be Kept?
Tax season is currently upon us. As a business owner, you may have a few questions regarding how long certain documents need to be kept. Well, the answer is, it varies depending upon the document. However, we do have a guide that can help you to keep track of your documents, and provide an answer as to how long you should keep them on file.
Documents to Keep Forever
Some documents don't have an expiration date as to how long they may be needed. These documents may include:
- Deeds
- Mortgages
- Property records
- Licenses and permits
- Tax returns
- Patents
- Articles of Incorporation
- Copyrights and trademarks
- Capital stock and bond registers
Documents to Keep for Seven Years
The following documents, while important, do not need to be kept for the rest of your life. These are documents and files that should be kept for seven years:
- Invoices to customers and from vendors
- Cash books
- Purchase orders
- Reports (Inventory, Employment tax, Accident reports/claims [that have been settled])
- Records (Employee personnel records [post-termination], Payroll)
- General journals
- Sales tax and Property tax returns
- Logs for automobiles
- Bills of lading
Documents to Keep for Three Years
Some business records, while still valid, just aren’t as important as those that are kept forever or even those that are kept for seven years. However, they still may be needed as a reference in case of an audit. Several of these documents are bank-related, while others may have to do with inventory or other business transactions. These are documents that should be saved for around three years:
- Policies for insurance (expired)
- Physical inventory logs
- Petty cash vouchers
- Bank reconciliations
- General correspondence
- Deposit slips from the bank (duplicates)
- Working papers or internal audit reports
What Should be Kept for a Year
Some files you will be glad to know only need to be kept for about a year. These documents include the following:
- Employment applications
- Stenographer notebooks
- Stockroom withdrawal forms
- Purchase orders (not including those that are part of purchasing department copy)
Most of these materials aren’t needed for tax purposes, so if you were to ever be audited, the IRS would not need these items for any reason. This means that you can, more than likely, go ahead and get rid of these items or delete them from your online systems without fearing any repercussions.
If you still have any questions regarding how long to keep tax files and certain documents, please contact our team at Schumacher Sama today; providing accounting services to the Greater Milwaukee Area!