Running a business can be confusing in many aspects. One common conundrum is in understanding how long it is necessary to keep documents around. With most businesses, files pile up fast and storage may run low. No need to worry—here’s a guide to legal files that you should hold onto, as well as an incremental timeline.

Documents to Keep Forever

Some documents should never be thrown away. These include the following:

  • Patents
  • Articles of Incorporation
  • Licenses and permits
  • Copyrights and trademarks
  • Capital stock and bond registers
  • Tax returns
  • Deeds
  • Mortgages
  • Property records

Documents to Save for Seven Years

The following documents are definitely important, but you don’t need to keep them for the rest of your life. For seven years, save documents relating to the following:

  • Sales tax returns
  • Purchase orders
  • Invoices to customers/from vendors
  • Personal property tax returns
  • Accident reports/claims (that are settled)
  • Logs for automobiles
  • Cash books
  • Bills of lading
  • Inventory reports
  • Employee personnel records post-termination
  • Employment tax reports
  • General journals
  • Payroll records

Documents to Store for Three Years

Some items aren’t as important as those that are kept permanently or those kept for seven years, but they still could be needed to refer back to for a while. A number of these documents are bank-related, while others have to do with inventory and more. What documents to save for three years include the following:

  • Logs of any physical inventory
  • Vouchers relating to petty cash
  • Bank reconciliations
  • Expired policies for insurance
  • Correspondence in general
  • Duplicate deposit slips from the bank
  • Working papers or internal audit reports

What to Hold Onto for Just One Year

You may be glad to discover that certain documents only need to be kept for one year. Some of these include the following:

  • Stockroom withdrawal forms
  • Notebooks that stenographers have used
  • Any purchase orders (excluding those that are part of purchasing department copy)
  • Personnel employment applications

Most of these items aren’t required for tax purposes, so even if you were to be audited, the IRS would not need them for any reason. You can go ahead and toss these items without fear.

Are you still confused about how long to keep certain documents, or would you rather not waste time dealing with these things yourself? Contact Allen Barron today at 866-631-3470 for professional, all-inclusive tax help with your business.


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