Record Retention

The issue of filing and maintaining records for business or personal use can be a hassle. The time it takes to organize files, along with the space those files consume in an office or on a hard drive, can seem unnecessary at times. However, to ensure you are in compliance when it comes time for an audit, a file is misplaced, a tax payment is disputed, or any other type of issue, there are guidelines to help. The Internal Revenue Service provides assistance on what files are necessary to keep and how long to keep them. Below are a few relevant examples.

Business Records
• Financial Statements (balance sheet, profit/loss, trial balance, etc.)- Permanent
• Accounts payable and receivable, vendor invoices- 7 years
• Articles of Incorporation, charter, public audit- Permanent
• Depreciation schedules- Permanent
• Dental benefits, garnishments, life insurance benefits- 5 years
• Disability benefits, medical benefits- 7 years
• Payroll checks, time reports- 7 years
• W-2 forms- Permanent

Individual Records
• Life insurance policies, medical records, wills- Permanent
• Forms 1099, schedule K-1’s, tax return copies, W-2’s- 7 years
• 401K statements, loan records, schedule K-1’s- 7 years after disposition

These items are some of the main records to be kept, but this list is far from exhaustive. As always, if you have any questions regarding what should be kept or how long to keep it, please contact the tax professionals at Wamhoff and they would be happy to assist you.