How Long to Keep Business Records
Most business owners don’t know how long they should hold on to old records. According to the IRS, here’s how long you should keep those records:
Permanently:
- general ledgers and journals
- payroll records, including W-2s, 940s, 941s
- year-end financial statements
- tax returns and supporting documents
- articles of incorporation, bylaws, meeting minutes, etc.
- retirement plan records
- mortgages and deeds
10 Years:
- bank statements and cancelled checks
- AP & AR documents
- invoices and billing information (customers and ventors)
- leases
- contracts with clients and suppliers
7 years:
- expense reports
- employee agreements/contracts/termination records
- documents related to litigation
- inventory documentation
3 years:
- employment applications
- employee disability and illness benefit records
- expired insurance policies
- general correspondence
This information is helpful but our favorite rule of thumb is to “save everything” and keep anything older than a few years in storage. Unless your business deals with mountains of paperwork, that method will be the easiest way to keep it simple and safe.
If you are a Corporation or LLC, then also make sure that you are complying with record-keeping, minutes and annual reports. Click here to learn about our ComplianceLock™ service which can automate these tasks.
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