Closing business how long to keep records

This is mainly due to the Period of Limitations , which is the time during which you can amend your tax return, or during which the IRS can perform an audit on your return.

For example:. You should keep employment tax records for at least four years after the date that payroll taxes become due, or are paid whichever is later. Hoping to get away with tax fraud? Just something to keep in mind!

The standard three year period of limitations applies to any deductions you make related to your property depreciation, loss from a sale, etc. But sometimes the length of time between when you dispose or sell your property and when you no longer need to keep those documents can be longer than 3 years.

Say you dispose of a property by selling it during the tax year, report the financial gain on your tax return, and file your tax return right on the tax deadline of April 17, These records usually include deeds, titles, and cost basis records for instance, receipts for equipment such as computers or vehicles.

If you have online banking, no. The digital copy will be just fine. This means you must be able to produce a printed, legible copy of the document for them upon request.

Digitizing your records is also a great way to avoid accidentally tossing them in a move or an overzealous fit of spring cleaning. We recommend scanning every record and receipt in your business, tagging it with a descriptive name, and archiving it forever. By Tanya Robertson. What Is Included in Payroll Liability? Accounting Records Financial records such as the accounts payable ledger, balance sheets, check register and general ledger will need to be kept permanently.

Tax Records With taxes, the length of time to keep records also varies. Personnel Records The recommended length of time to keep personnel records also varies. Corporate Records With the exception of surety bonds that need to be kept for three years and administrative records that need to be kept for 10 years, all other corporate records need to be kept permanently.

References QBalance. That said, there are general guidelines as to the length of time for keeping common documents. From the date of filing, hold cancelled checks, bank deposit slips, credit card statements and general ledgers for at least three years. Hold bank statements, inventory records, invoices, sales records, cash register tapes, W-2s, s, and other tax filing documents for at least six years.

If your business was set up as a corporation, keep monthly and quarterly corporate financial statements for at least three years. If a past company employee files for unemployment benefits, applies for a new job, or has questions dating back to his time of employment, having these records accessible will be most valuable.

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