How Long Should You Keep Your RecordsJanuary 30, 2006 — 2,200 views
Is your office drowning in paper? Even with all of the electronic storage mediums available, we often get questions on record retention.
There is no general statue of limitations for how long a business needs to hang on to all of its records. Federal and state governments do not always agree and the rules seem to change more often than we like.
Certain items should be kept permanently. Among these are:
- articles of incorporation
- audit reports from accountants
- deeds and bills of sale
- important and legal correspondence
- minute books for director and stockholder meetings
- assets you depreciate (including records of how much you paid for the property and when you placed assets in service or changed them from personal to business use)
- capital improvements
Other documents should be kept for a minimum of seven years. These include:
- W-2s or 1099s
- receivable and payable ledgers
- time cards and compensation paid to employees, independent contractors, repairs, rents, taxes and licenses, bank charges, business insurance, utilities, postage and shipping charges and travel and entertainment expenses
- accident reports and claims (settled cases)
Documents that can be destroyed after three years include:
- bank deposit slips
- general correspondence
- employee expense reports
- employment applications
This list is not all-inclusive and represents of our best estimates of the minimum time you should keep certain documents.
It is important to think about adopting a record retention policy for your organization. Consider where the files will be kept, how secure the files will be and the conditions under which the files will need to be stored, as they should be organized in a way that allows easy retrieval.
If you would like a copy of our detailed record retention schedule or have questions about retaining records, please contact your Rea & Associates, Inc. representative.
-By Jim Hensler, CPA (Shareholder, Marietta office) and Kathy Davis, CPA (Principal, Medina office)
Rea & Associates, Inc.