For small businesses, the amount of papers that must be kept on record can become overwhelming. It’s a good idea to periodically go through the files and shred old documents that are dead space in the file cabinet. While this should be done at least once a year, you may also want to go through the cabinets prior to moving to be sure you’re not towing around useless documents. Be sure that any documents that are discarded go through the shredder first so that confidential business information does not leak to the public.
The toughest question is which documents to keep, and which to discard. Here are some guidelines.
Keep for life of business…
Deed on the property
Vehicle title for company vehicles
Financial statements on profit and loss, etc.
Keep for at least seven years…
Income tax returns
Annual bank statements
Annual credit card statements
Keep for at least four years…
Tax records for employees
Keep for one to three years include…
Paid bill receipts
Appliance manuals and warranties
Receipts of items under warranty
Monthly bank statements
Monthly credit card statements
Items to discard…
Coupons after expiration date
Other records no longer needed
Additional notes about keeping records…
Income Tax Returns. Keep copies of business income tax returns filed for a minimum of three years. If the IRS suspects that that you failed to report at least 25% of your income, they have up to six years to take action, so it may be safer to keep these documents at least six years. However if you filed a deduction for bad debt, you are better off keeping the past seven years of records. Any tax return information over seven years old can be discarded unless it is necessary for pending law suits. For more information on retaining tax records, check the IRS.
Employment Records. Employee tax records should be kept for at least four years after the due date or the payment date of the employment tax. Discrimination claims can be kept for 4 years after the claim was concluded. Any other files relating to employees such as accident records and workers compensation documents should be kept for at least seven years after the employee left the company. Any documents pertaining to employee benefits, pension payments, or profit sharing, should be kept permanently.
TWO MEN AND A TRUCK Sacramento employs a staff of over 40 Full-Time Movers and Drivers, with a fleet of 10 trucks. We have performed home and business moving services in and around the Greater Sacramento area for almost 10 years. Our award winning services include full service moving and packing services and we also sells boxes and packing supplies.