There are certain documents that you need to keep, but only up to a point. They usually deal with tax documents. Historically, it`s best to keep federal and state tax returns in a safe place for seven years. In the event of a tax audit, your documents are easily accessible. Let`s help clear up this confusion by offering some guidelines on which documents should be kept and for how long. Records retention policies typically require companies to retain records for one, three, or seven years. In some cases, you may need to keep the records forever. If you`re not sure what to keep and shred, your accountant, lawyer, and state records agency can give you advice. Your state and local government may have stricter policies. Some external organizations, such as the Payment Card Industry Security Standards Council (PCI SSC), require companies to retain documents for PCI compliance. Several federal organizations have record-keeping requirements. Policies may vary by industry and circumstances.
It`s important to understand which categories apply to your business so you know what records need to be kept. There are always documents that you need to keep forever. These are documents that prove ownership or legally binding documents that you must keep. You should keep these types of documents in a safe place, such as a personal safe or safe. These include: estate plans, wills, life insurance, birth certificate, social security cards, marriage documents. If you choose to do so, we recommend backing up these documents to multiple locations with at least one offsite backup (for example, if you`re using secure cloud storage, make sure you have a backup for a second service, or use a hard drive stored in a locker). For many industries, document retention is critical to business security. Every company should have a retention policy that describes the lifespan of its records, from creation to destruction. People who fear losing something important sometimes accumulate everything; Others who worry about things like identity theft are too quick to shred documents. However, most of us fall somewhere between these two extremes: simple and total confusion about what to keep and how long to keep it.
Most documents you receive from your bank or other service providers can usually be safely disposed of after about 30 days or less. However, for the purposes of registering a self-employed income tax return, you should normally keep the following for about a month: Once you know what types of documents you have, it`s time to figure out how long to keep tax returns, returns, and other documents. Below, we`ll discuss legal retention requirements and best practices for records not covered by federal or state laws. In 2002, the Sabarnes-Oxley Act was passed, which imposed many restrictions on a company`s records management. It defines „records” broadly as anything related to the business that can be represented by words or numbers, meaning that many records need to be managed. However, you should always keep a physical copy of the following, preferably securely in a locker: Keep a digital or printed copy of your monthly bank and credit card statements for the past year. It`s a good idea to store your digital copies online if you decide to go paperless. You should also stick to payment stubs so you can use them to verify the accuracy of your Form W-2 when tax season arrives. It may be preferable to retain all legal correspondence, as federal guidelines are currently lacking. The retention period for court documents also changes depending on the state.
The time can vary from a few days to six months to ten years to fifty years. The American Bar Association created the Modern Rule, which sets standards for how a lawyer should retain his client`s legal documents after a case is closed. The IRS has established retention periods for tax documents. In general, you should keep records that support an item of income, deduction or credit on your tax return until the statute of limitations on the tax return expires. The limitation period in most cases is three years and can be up to seven years, depending on the circumstances. Again, please consult a professional accountant before following the donated material. Other retention periods for accounting records include: Your tax returns are important documents that you should keep as part of your financial history. You should keep a permanent electronic or printed copy of each year`s tax return and any payments you make to the government. Also, it`s a good idea to keep records of important financial events such as legal deposits or inheritances. You can easily access your paperless statements and documents and keep them securely online.
Bank of America customers can easily manage paperless statements and documents through mobile and online banking. California has established regulations in Section 19404 of its tax code regarding the retention period of tax records (6 years for income taxes). Title 8 of the California Code of Regulations also contains guidelines for the retention of employee medical records. Retention policies are clearly an important consideration for many industries and businesses. A retention strategy is just the first step in managing all your documents. Finally, a document is reaching the end of its life and must be disposed of properly. Guidelines have also been established for the handling of these files. The following questions should be applied to each document when deciding whether to keep or discard a document. In both cases, they must be stored in a safe place so that the files remain safe and intact. They should also be easily accessible and findable in case they are needed in an emergency. There are many documents that people receive every day that may need to be kept or discarded for future reference.
Often, however, many of these items can be disposed of after a year. This is because of their impact on your tax return, and once your tax return is filed and approved, you don`t need to keep it any further. Documents you should keep for one year include: monthly bank statements, monthly credit card statements, receipts for major purchases, items related to your current tax return such as charitable donations or stock purchases, and annual insurance policies. When the year is over, it is best to throw away these items because they no longer have any value. Keeping them longer creates additional stress and clutter that prevents you from feeling secure in your legal and financial planning. We could all use less paperwork in our lives. However, it is advisable to be careful when cleaning your files. When it comes to essential legal forms or contracts, the question should be how long you should keep important documents, not whether they should be kept at all.
LawDistrict helps eliminate some of the difficulties in the case by helping to update or customize essential contracts and legal documents. Try it now to create any shape of your choice in minutes. For permanent records, scanning documents can be a good solution. Storing paper documents for a number of years will take up space. An efficient and secure way to store your documents while saving space is to use an electronic document management system. We can also help you find a document scanning company that can convert all these paper documents into electronic records. Each industry has its own regulations. Here we focus on just three major industries: accounting, medicine, and law. For physical documents, designate a safe and remote place in your home where all paper documents that protect them from damage or theft are kept. For digital documents, be sure to archive and secure all electronic documents. It`s a good idea for these records to be password protected.
This article looks at how long documents should be kept and when they can be safely disposed of. We also explain some of the best ways to securely store your legal forms and contracts so that nothing essential is lost or damaged if you keep detailed records. While it may seem like a good idea to stick to everything, the resulting clutter could make it difficult to find important documents among all the unimportant documents. And even with digital documents, you can still run out of space. However, for tax purposes, the IRS often requires individuals to retain certain supporting evidence for up to 7 years for future valuation. Important documents you should keep longer include: Finally, it`s important to make sure your documents are in order so you can take control of your financial, legal, and personal life. One of the ways to improve your position is to organize your documents. Since we are all inundated with files and documents, it is important to make sure that you only keep the important items. We hope this article will enlighten you on what you need to do for your personal legal issues.
If you need help creating an estate plan, prenuptial agreement, or simply need sound advice from a Tacoma law firm you can trust, contact us at Andrews & Arbenz today to find out how we can help. For the most important legal documents, you need a certified true copy or the original. It`s important to organize your files carefully so that your most important contracts, forms, and files can be easily found when needed. You should keep some documents longer than others and organize these documents for financial and estate planning purposes for accessibility. Some documents you should keep forever, others for shorter periods – but many documents aren`t really important enough to store.