How long should you keep business records?

You should keep business records for at least seven years. This is the amount of time the IRS recommends businesses and companies keep business records for tax purposes. This time frame is also backed up by many professional attorneys, accountants, and bookkeepers.

Here are the specific documents in your business records you should keep and the time frames you should keep them for;

• Business tax returns

  Business tax returns and other supporting documents and records should be kept for at least seven years. This represents the time frame in which, after it has concluded, the IRS can no longer execute an audit on your business tax returns.

• Payroll tax records

  Payroll tax records should also be kept for at least seven years. This includes items like:

  • Timesheets

  • Employee wage and salary information

  • Pension payments

  • Employee benefits documents

  • Tax deposits

  In certain circumstances, these documents might only need to be kept for a total of four years.

• Current employee files

  The seven-year time frame here even applies to employees who have left your company or business. You should keep their files on record for at least seven years after they have left the job. And if the employee has filed any workman comp claims, it is advisable to keep their records on file for 10 years.

• Job applicant documents

  You should keep all job applicant documents of employees you have hired for at least seven years. You should also keep job applicant documents of candidates you did not hire for at least three years.

• Ownership records

  Ownership records are vitally important documents that you should retain indefinitely. This includes items like;

  • Business formation documents

  • Company by-laws

  • Annual meeting minutes

  • Stock ledgers

  • Property deeds

  These are all crucial documents for your business that should not be discarded at any point in your business's existence.

• Accounting service records

  Accounting service records should be kept for a minimum of seven years. Professional accountants also often suggest keeping the following records permanently:

  • Financial statements

  • Check registers

  • Profit and loss statements

  • Budgets

  • Cash books

  • General ledgers

  • Audit reports