Any business’s company records are a crucial part of managing and maintaining a successful company. Not only do they provide detailed hiring practices and compliance with regulations, they ultimately show the amount of taxes a business owes.
So, how long should these records be kept? Well, it depends.
Take a look at the following types of business records to know just how long you should keep them:
Employment records, including resumes, job applications, personnel files, human resources records, etc. should be kept for at least 3 years, depending on the amount of employees. An employee’s record should be kept for the entirety of the time they’re hired, and at least 7 years after they leave. In the event of a workplace injury, keep the record for 10 years.
Financial and operational records– This includes bank and credit card statements, invoices, and sales records, which all be kept for at least 7 years. While the records are not directly related to filing tax returns each year, these types of records are ideal to have on hand in the event of an IRS audit.
Ownership records should be kept forever. Examples include any documentation of ownership of business assets, as well as title deeds and sales contracts.
Payroll tax records -including timesheets and employee info- should be kept for at least 4 years after the return was filed or the day in which the taxes were paid.
It always a good rule of thumb to keep your records organized and easily accessible for tax purposes, but you definitely don’t want to bog yourself down with unnecessary paperwork past its lifespan.
Still have questions about record keeping for your business? Get in touch with Paragon, we’ll help you stay on the right track!
