How Long Do I Have to Save My Business Documentation?
The question always comes up: how long do I have to save my information and what should I be saving. To unbury your office or kitchen table, here is a guide to financial record-keeping.
To get started, I recommend you get organized. Invest in a file cabinet and some folders to keep things separate and easy to find. For important documents you want to keep, consider getting a small fire resistant safe or a safety-deposit box at you bank. Backup all your computer files and keep them in safe place as well. Some documents you need to keep forever such as:
– Tax Returns
– Birth and marriage certificates
– Current passports
– Inventory for insurance records
– Current insurance policies
– Social Security cards
– Stock purchase agreements
– Divorce papers
The bulk of your financial backup, receipts, etc. need to be kept for a minimum of 3 years from when you file the return. This is how long you are subject to an IRS audit. However, if the IRS can prove fraud, they can audit back seven years so keep your documentation accordingly. This backup includes cancelled checks, purchase/sale of any stock, vehicle information and ATM/credit card receipts just to name a few.
When you do decide to discard your paperwork, shred anything that contains personal financial data such as Social Security numbers, PIN numbers or passwords, etc. Identity theft is growing everyday.
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