HOW LONG SHOULD YOU KEEP BUSINESS RECORDS

(To those I care about, the purpose of the email that I send to you is not only to keep you informed of what is important, nor is it only to show you what I know, although you can always call on me, but the purpose of the series of informative emails that I create and send is to create enough concern in your minds that when something comes to your attention, you will remember and know enough to make a note of it and it’s importance and ask me how it affects you and your business. I try to minimize any risk, expense, delay or anything that would adversely affect you. I hope that these timely and informative messages do just that)

Keep for one year

Duplicate bank deposit slips
Bank Reconciliations

Keep for three years

Insurance Policies
Petty Cash Slips
Correspondence
Employment Applications

Keep for Seven Years

Payroll records and related documents
Accounts payable ledgers
Vendor invoices
Time Cards
Contracts and Leases
Canceled Checks

Keep Permanently

Deeds and mortgages
Cash ledgers
Property appraisals
Contracts and leases – major
Accountant’s report
Canceled checks for large and important papers
Insurance records
Journals
Bills of sale for important purchases
Financial statements
Minute Books, bylaws and certificate of incorporation
Correspondence – major matters and legal
Tax Returns
Chart of Accounts
Property records
General ledgers

We recently had in the office a situation, where a client was contacted by IRS and notified that their 1997 return was never filed. THEY FILED IT TIMELY. However, because they no longer maintain copies of records from 1997, they are at a loss. Who thinks to keep records for that long? Even if they sent the return “certified mail, return receipt requested” and attached the proof of mailing… the proof of mailing would have been destroyed with the original return. They would have owed the Internal Revenue Service quite a bit of back taxes, penalties and interest… not to mention the hassle of dealing with this situation. Good for them, that WE have a copy. However, we now suggest (above) that you keep your copies of old tax returns permanently.

Respectfully,
Joseph S. Lania, CPA
office (954) 432-2299

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