Keeping your records secured is vital to run a successful business. There are many file management softwares to help you store records online, but not everyone can afford those. Besides, security is another key concern when it comes to storing your files electronically. If you choose to store your business records in a physical location, like a specialized record storage facility, or self storage, you need to know how long you should keep those records in order to best utilize your storage space.
Business Income Tax Returns and Supporting Documents
Typically, IRS may come after your business for failing to report income for up to 6 years. Therefore, it's better for business owners to keep tax records, business income reports, and related supportive statements for more than 7 years.
Employment Tax Records
The IRS recommends that you keep all employment tax records for at least 4 years after you pay the tax because these records contain employer identification number, amount of salaries paid, pension payments, tax deposits, etc.
Business Asset Records
It's important to keep your property title in a safe, secure spot until you sell or otherwise properly dispose that property.
Human Resources Files
Records of employee benefits, pension payment or profit sharing plans are recommended to be kept permanently. Information about current employees should be retained properly while they are working for you and 7 years after they are terminated.
Bank Account and Credit Card Statement
Generally, you should keep your bank statements for at least 7 years if they are supporting documents for tax. If they have no tax purpose, you can dispose them after two years.
A general rule: keep tax-related records for at least 7 years!
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