How Long Should I keep My Accounting Records?


The IRS says you must keep your records as long as they may be needed to prove the income or deductions on a tax return. For example, determining gain or loss on a sale or disposal of an asset, you will need to substantiate the cost, so records and receipts related to that asset must be kept as long as asset is still in service and then add 3 years. The IRS says the length of time to retain business documents varies depending on how honest and how accurate your tax returns have been. If you file a fraudulent return, you must keep records indefinitely.. Reality is that destroying business records too soon or keeping business records them too long (subpoenaed and introduced in evidence to support the claims of adversaries) has cost organizations millions of dollars in penalties, lost lawsuits, and created storage problems. This link to the record retention table is based more on business status quo rather than on authority, so use your best judgment and consult with your CPA and put together a schedule for keeping records and retaining business documents for your employees to follow…