April 2019 Newsletter – Tax Season
It’s that time of year again! Since you have to take care of taxes, now is the perfect time to finally get your tax documentation in order. Effective tax document retention and record keeping can save you tons of headaches down the road. The question is, aside from the actual tax returns, what documents should you keep and how long do you need to keep them?
The amount of time you need to keep tax documents depends on the information it contains. Tax returns have a “period of limitations” which determines how long you need to retain records of documentation which pertains to said tax record. In general, most tax documentation must be retained for three (3) years. Employment tax records should be kept at least four (4) years after the date the tax becomes due or is paid (whichever is later).
Of course, we always recommend checking with a professional as your requirements may be different.
BEYOND TAXES
In today’s busy world, it is extremely important to maintain records. The best time to organize your documents is while you are receiving them. Incidents such as fire, flood, theft, and other catastrophes require immediate access to insurance papers. Medical documentation needs to be on hand if an injury occurs, to ensure you have adequate treatment. Don’t leave yourself scrambling to find paperwork in an emergency.
OTHER TYPES OF RECORDS
Many organizations have established standards for record retention. Financial institutions operate under FINRA, the Financial Industry Regulatory Authority. Medical records follow HIPAA standards (the Health Insurance Portability and Accountability Act of 1996). Other industries have similar foundations for record retention, such as real estate, legal authorities, and legal practices. Though not all these regulations may apply to you and your business, there are some commonalities among them which give good general guidelines for everyone when it comes to recordkeeping. Below are some common dates which you will find apply universally as record retention policy requirements:
- Bank Statements: 3 Years
- Employment Applications: 3 Years
- Accident Reports and Claims: 7 Years
- Sales Records and Invoices: 7 Years
- Accounts Payable and Receivable: 7 Years
- Terminated Personnel Files: 7 Years
- Funeral Records – Many in perpetuity
In many cases, some records need to be kept permanently: cash books, accounting charts, stock records, year-end financial statements, stockholder minute books, property appraisals, and other critical documents. Please keep in mind, as the years pass, many of these physical records run the risk of degradation or accidental destruction, which could leave you in a tough situation trying to replace them (if you can at all). When you are organizing, and you find yourself surrounded by towers of paper begging for a fire or flood, we at Graphic Imaging Services can help you create digital copies of these records, to eliminate the risk of loss and catastrophe. Please call us for more details: (702) 222-3590
This article is not intended to provide you with professional advice, but a general guideline. Be sure to check for your individual requirements.