How Long Do I Have to Keep Records?
“What records do I keep?”, “How do I keep each type of record?”, and “How long do I keep each type of record?” are questions clients ask all of the time.
Our accounting team regularly helps business owners with guidance on good record maintenance.
We’re all trying to control our costs and liabilities through good record keeping. In my business, I aim to make record keeping as efficient as possible, so that my whole team can keep up with what’s going on with each client. It’s a lot to think about.
You can see one great article that my head accountant John Murray keeps showing to me as well as our clients by clicking here. It has a great chart of the type of record and how long to keep it, as well as which ones can be kept electronically.
Most of us know that we should keep our receipts and our employee records. We know that the IRS and other governmental agencies could ask to see this stuff.
Have you thought, though, about what happens if a lawsuit comes up against you or against one of your customers? Did you know that records you keep can be demanded for a lawsuit, not only against you, but against you clients? Your records can be subpoenaed. Keep that in mind when you keep records longer than necessary.
Keeping records is important, but so is regularly destroying records on a regular schedule, as well as how you destroy them. Invest in a shredder or look into a paper destroying service.
I have a CPA friend in Arizona who visits a local paper mill; he watches as his old documents are put into the paper pulping machine. The paper mill gets free product to recycle, and he gets his documents destroyed for free. His old un-needed tax documents are turned into toilet paper.
Hopefully this will help you out with the general rules of thumb on record keeping, but as always, do not hesitate to give us a call if we can help you as you implement your plans.
Tags: IRS, John Murray, Record Keeping
