Figuring out what documents to keep and which to shred – and how long to keep them – a good organizational system will help prevent things from turning into chaos and clutter. This system can be as simple as a filing system with records marked with an “expiry date” (i.e. 3 months, one year, etc.) or an online filing system with similar labels. Check your documents regularly to keep things up to date. Shredding documents is the most important way to protect yourself from identity theft. As a general rule, some documents absolutely need to be shredded. This includes all account numbers, dates of birth, maiden names, passwords and PINs, signatures, and Social Security numbers. In a society dominated by paperwork, the question of how long to keep important documents is confusing for most people. We take particular care of documents of a financial or personally identifiable nature. Organizing your physical and cloud-based storage as well as developing a DRP is the best way to ensure your business meets record-keeping standards. Read all policies carefully and create a plan that is easy to implement and adhere to. 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. 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. 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. However, nowadays, it is also common to receive or keep digital versions of your records. You can often receive bills and bank statements electronically rather than by mail. This makes e-filing a much more convenient option for modern accounting. 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. However, you should always keep a physical copy of the following, preferably safely in a locker: 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. If you`re dealing with physical paperwork, it`s best to have a dedicated filing system and a room where everything can be safely stored. This can be something as simple as an envelope for short-term storage or a dedicated folder or cabinet for storing long-term documentation. 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 tax return, you should generally keep the following for about a month: Many legal documents and financial forms may need to be retained for the long term.
In some cases, legal documents may expire after a certain period of time if an end date has been written in the text, for example with a general power of attorney. If this is the case, they can often be eliminated when this happens. 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: If your records are no longer needed for tax purposes, don`t throw them away until you`ve checked to see if you need to keep them longer for other purposes. For example, your insurance company or creditors may ask you to keep them longer than the IRS. A retention period is the length of time a document must be kept in paper and electronic form. The duration is often industry-specific and depends on the likelihood that the documents will be used for litigation in the future.
