How Long Should You Keep Business Records?
Many businesses aren't sure how long records must be saved in the paperless era. Record-keeping is a boring, but important business activity, and if you make the wrong choices, you risk litigation, succession planning problems and the wrath of the tax man. Understanding how long should you keep business records will help you avoid these problems. Whether you're wondering how long to keep bank statements or how long to keep pay stubs, business record retention is critical for your financial record keeping. Read on to learn about retention periods for your accounting documents. The Internal Revenue Service has established some basic record-keeping rules for tax documents. Outside the tax arena, there's remarkably little guidance about how long you should keep business paperwork. Most lawyers, accountants and bookkeeping services recommend keeping original documents for at least seven years. As a rule of thumb, seven years is sufficient time for defending tax audits, lawsuits and potential claims. These periods are not offered as final authority, but as a guide. Your CPA, outsourced accounting service or tax attorney may recommend a different approach for your record retention based on the rules of your industry and the specific needs of your business.The General Rule
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