How Long Should You Retain Records?

record retention NYCOne of the keys to running a successful business is record retention. You will want to be sure that you keep the records that you might need on hand at all times. Knowing what to keep and what to discard can be confusing, though, so you may need some assistance with record retention in NYC. Utilizing a professional record retention and storage service will let you maintain more complete records without compromising valuable office space, should an audit ever arise. Here are some helpful tips as far as what you should keep:

Keep business income tax return records for at least seven years.

If you have the room to do it, you should try to keep income tax returns for as long as possible. Not only will they help you should the IRS ever audit your business, but they will also make it easier to complete future returns. If you are trying to save space, retain files for the past seven years, as this is as far back as the IRS may file an audit.

Keep employment tax records for at least four years.

When you have employees, you will need to provide them with tax records at the end of each year. These records will include names, social security numbers, wages, pension payments, and more. The IRS recommends file retention for four years after the date on which the taxes were due to be paid.

Keep all business ledgers, journal entries, and other documents for at least seven years.

This category is trickier than the other categories listed here, because there are many different documents that could fall into “other.” For example, annual reports, Board of Director information, and even supportive tax records are included. In general, seven years is the guideline for record retention, but your accountant may advise you to hang on to these items for as long as possible in certain situations.

Keep human resource files for former employees for at least seven years.

Regardless of an employee’s reason for leaving your company, you should keep their information on file. You should also keep the information of any job applicants who were not hired at your company for three years for more complete record keeping.

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