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How Long Should You Keep Business Records?
Introduction
Proper record-keeping is crucial for any business, not only for operational efficiency but also for legal and tax purposes. Understanding how long to retain various documents can help businesses stay compliant while managing storage effectively.
Record Retention Guidelines
- Tax Records: Keep for at least 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
- Employment Tax Records: Retain for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
- Business Income and Expenses: Keep for 3-7 years, depending on the circumstances.
- Bank Statements: Retain for 7 years for most businesses.
- Payroll Records: Keep for 3 years.
- Permits and Licenses: Retain for the duration of their validity plus a few years after expiration.
Conclusion
While these guidelines provide a general framework, it’s advisable to consult with a legal or financial professional for specific advice tailored to your business. Digital storage solutions can make long-term record-keeping more manageable and space-efficient.