Tax Season is Over: How Long Should You Keep All of the Documentation?
The age-old dilemma of record retention requirements has not gotten any easier - even with the advent of electronic storage. Even if you religiously keep as many of your business records as possible on your computer, and diligently back those records up, you still need to retain many records for varying periods of time. There is not a single statute of limitations for the many categories of records a business needs to hang onto for awhile. Requirements also vary by industry. The art of effective record retention boils down to two standards—reason and risk. Through the implementation of a formal record retention program, you may be able to reduce your costs significantly.
How Long Must Each Record be Kept?
While there are not absolute rules for determining the holding period for many types of records, there are some general guidelines contained in federal and state government publications. For certain types of records, there are government regulations that mandate
a required retention period. The following page contains a list of general guidelines for your reference.
How are Records Properly Retained?
Businesses should adopt written record retention policies addressing which records should be retained, for what length of time, and in what manner. The policy should also address electronic records, including provisions for periodic backups and archiving of email and other electronic information, as well as the transferring of electronic information to a read-only format where appropriate.
Davis & Hodgdon Associates CPAs has published a record retention chart to act as a general guideline for the retention of many records. To view the chart please access our white paper here: https://www.dh-cpa.com/client_media/files/pdf/2015Record-Retention.pdf.
Do you have questions about retention of specific types of documentation not included here? Davis & Hodgdon Associates CPAs has been assisting Vermont individuals and business owners with tax consulting and retirement planning for more than 25 years. Call our office in Williston 802.878.1963 or Rutland 802. 775-7132 to schedule a tax planning strategy session today.