Document retention guidelines typically require businesses to store records for one, three, or seven years. In some cases, you need to keep certain records forever. If you’re unsure what to keep and how to safely get rid of documents, your accountant, lawyer may provide guidance. To find your state’s document retention guidelines, visit the state archivist’s site.
Use the following information as a guide for your document retention policy:
- Insurance, permits, and licenses: Keep all permits, licenses, and insurance policy documents until you receive replacements for expired ones.
- Legal documents: It’s best to keep business formation records, deeds, patents, and trademark registrations, property appraisals, bill of sale documents, and other ownership records indefinitely.
- Accounting documents: Retain all small business accounting records applicable to your taxes, including depreciation schedules and year-end financial statements, for at least seven years. Your certified public accountant may recommend keeping accounting records indefinitely.
- Business federal tax returns: According to the IRS, tax returns should be kept for three to seven years, depending on the situation. But if you don’t file a return, the IRS recommends keeping records indefinitely. Keep federal tax returns, including payroll tax records, for seven years to stay on the safe side.
- Personnel records: Different personnel records have different requirements, although most need to be retained for at least three years. For instance, documents relating to workers’ exposure to harmful agents must be kept for 30 years after their employment ends. In contrast, you need to keep OSHA accident forms for five years after the incident.
- Payroll information: The FLSA requires employers to keep payroll records “for at least three years.” In addition, all companies covered by federal antidiscrimination laws must retain records showing their reasoning “for paying different wages to employees of opposite sexes in the same establishment.”
- Bank statements: All business banking, credit card, and investment statements, as well as canceled checks, should be kept for seven years, possibly longer, depending on your business or tax circumstances.
- Hiring records: Keep job advertisements, applications, and resumes on file for at least one year.
Your agent at Professional Underwriters can help with insurance related document retention. Reach out today!