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Record Retention- To Keep or To Shred?

Posted by Emily Taibl on May 26, 2017 6:00:55 PM

the stack of document in the office

We all know the feeling… it’s time to clean the office and you’re sorting through stacks of documents, filing them away, shredding some, creating more piles… and the questions keep arising.  Can I toss this?   Is this something important to keep?  I’ve been holding on to this for 3 years, surely it’s OK to let it go now?

The short answer is you need to keep them for as long as the IRS can potentially challenge you on the item to which a particular record relates.  There is no limit for the IRS to bring an action against someone who has filed a false or fraudulent return.

The following chart provides a general guideline for the retention of many common records.  It’s important to note that the specific holding periods of any record retention policy should be given careful scrutiny by management and legal advisors in light of any pending investigations, regulated industry requirements or contract covenants.  In other words use this as a guideline, and if in doubt feel free to contact Sweeney Conrad for advice.

Accounting Records Retention Time
Auditors’ report and annual financial statements Permanently
Bank statements and deposit slips 7 years
Cancelled checks (for the following):

Fixed Assets

General

Payroll

Taxes (payroll related)

Taxes (income)

 

Permanently

7 years

7 years

7 years

Permanently

Cash Disbursements Journal Permanently
Cash Receipts Journal Permanently
Chart of Accounts Permanently
Deeds, mortgages, bills of sale Permanently
Electronic Payment Records 7 years
Employee Expense Reports 7 years
Fixed Asset Records (Invoices, Depreciation Schedule) Permanently
Freight Bills and Bills of Lading 7 years
General Journal Permanently
General Ledger Permanently
Inventory Listings and Tags 7 years
Invoices: Sales to Customers/Credit Memos 7 years
Patent/Trademark and Related Papers Permanently
Payroll Journal Permanently
Production and Sales Reports 7 years
Purchases 7 years
Purchase Journal Permanently
Purchase Orders 7 years
Sales or Work Orders 7 years
Subsidiary Ledgers (Accounts Receivable, Accounts Payable, Equipment) 7 years
Time Cards and Daily Time Reports 7 years
Training Manuals Permanently
Trial Balance- Year End Permanently

 

Insurance Records Retention Time
Accident Reports and Settled Claims 6 years after settlement
Fire Inspection and Safety Reports 7 years
Insurance Policies (After Expiration) 7 years

 

Legal Documents Retention Time
Articles of Incorporations and Bylaws Permanently
Amendments to Above Permanently
Buy-sell Agreements Permanently
Contracts and leases (after expiration) 7 years
Employment Agreements 7 years
Legal Correspondence Permanently
Minutes Permanently
Partnership Agreements Permanently
Real Estate Permanently
Stock Certificates and Ledgers Permanently
Tax and Legal Correspondence Permanently

 

Tax Records Retention Time
IRS or FTB Adjustments Permanently
Payroll Tax Returns Permanently
Property Basis Records Permanently
Sales and Use Tax Returns Permanently
Tax Returns as Filed (Copies) Permanently
Tax Returns & Cancelled Checks for Tax Payments Permanently

 

Topics: Tax

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