How long should business records be kept?

Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.

What is a retention schedule in business?

Retention schedules establish guidelines regarding how long important information must remain accessible for future use or reference, as well as when and how the data can be destroyed when it is no longer needed.

How long should you keep monthly statements and bills?

Most bank statements should be kept accessible in hard copy or electronic form for one year, after which they can be shredded. Anything tax-related such as proof of charitable donations should be kept for at least three years.

How do you create a record retention schedule?

Six Key Steps to Developing a Record Retention Policy

  1. STEP 1: Identify Types of Records & Media.
  2. STEP 2: Identify Business Needs for Records & Appropriate Retention Periods.
  3. STEP 3: Addressing Creation, Distribution, Storage & Retrieval of Documents.
  4. STEP 4: Destruction of Documents.
  5. STEP 5: Documentation & Implementation.

When should records be destroyed?

Once the dates have passed, the document no longer needs to be kept and can be destroyed. All business agreements and contracts (for instance employment contracts) should be retained for six years before you can destroy them.

How many years of accounts do I need to keep?

How long to keep records. You must keep records for 6 years from the end of the last company financial year they relate to, or longer if: they show a transaction that covers more than one of the company’s accounting periods.

How long should bank statements be kept?

How many years of credit card statements should you keep?

According to the IRS, it generally audits returns filed within the past three years. But it usually doesn’t go back more than the past six years. Either way, it can be a good idea to keep any credit card statements with proof of deductions for six years after you file your tax return.