Recordkeeping for businesses

For example, if your business claims the R&D credit, you may be tasked with presenting records that show how the business qualified for research expenses. A thorough, thoughtful record retention policy is no small feat, but it is an essential component of every responsible company’s risk management arsenal. Equally important, regularly review and update your policy, as legal requirements and technologies evolve and change. Provided the retention periods are in conformity with applicable guidelines, it is prudent to set retention periods to the minimum required, to minimize the risk of unauthorized access to data. This information is for general guidance only and should not be considered legal or tax advice. Consult with a qualified accountant, attorney, or other professional to develop a record retention policy that meets the specific needs of your business.

Services

This document allows for the purchase of assets or stock of a corporation. An attorney should review it to make sure it’s accurate and comprehensive. This category also includes employee identification information and details regarding any withheld taxes, such as Social Security or Medicare contributions . Be aware that you now house sensitive information like Social Security numbers, and you should take measures to protect that data. In addition to the building itself, property insurance covers furniture, equipment, inventory, landscaping, and even your outdoor sign. It is best to keep your business insurance policy or at the very least the declarations page.

Using Your LLC Bank Account After Dissolution

It also gives you time to request an appeal if you do not agree with the audit results. According to the IRS, you do not have to agree to extend the statute of limitations date. However if you don’t agree, the auditor will be forced to make a determination based upon the information provided. This is where you should enlist the help of an experienced tax attorney who can help you interact with the IRS and advocate for you with the statute of limitations. LegalZoom provides access to independent attorneys and self-service tools.

• However, they are unlikely to be as understanding if you declare that you have lost your records midway through an investigation.
• General liability insurance for businesses helps safeguard business owners against unexpected risks that could result in financial disaster.
• As your business grows, expanding digital storage is relatively easy.
• Members of the LLC will have a certain period of time to wind up company affairs after dissolution has occurred.
• For smaller businesses, D&O claims may not occur very often, but when they do it can be financially draining to fight the lawsuits.
• In today’s digital age, both paper and electronic records are acceptable forms of documentation.

Make sure you meet all requirements

Just like a D&O, you can safely discard the policy after the term or after receiving a replacement policy. However, if HMRC is investigating you, you will need to keep them until HMRC says otherwise. The IRS recommends you back up your paper documents electronically in case of flood, fire, or other disaster. Choose a method of electronic storage—whether on your computer, in the cloud, or on a thumb drive or external hard drive—that offers the most safety and security against identity theft. Make sure your computer is password protected, and consider using an encryption program like Microsoft BitLocker, Apple FileVault, or a third-party program.

Employment and HR Records

Sometimes it is necessary to produce receipts or other documentation that retained earnings itemizes your purchases to prove that the purchases are for your business. Your business tax records are also helpful for your accountant to prepare your tax filings. Your accountant may require access to your business financials in order to prepare an accurate business income tax return. Your accountant may also want to review receipts or other documents to advise you if certain expenses are ordinary and necessary business expenses that can be deducted on your business tax return. Otherwise, you may run into issues when trying to resolve obligations post-closure. Keep business income tax returns and supporting documents for at least seven years from the tax year of the return.

Build a record retention policy with the help of Landmark CPAs

Digital files offer the advantage of real-time access to information from anywhere. As your business grows, expanding digital storage is relatively easy. But technical issues such as hardware failures can render your files inaccessible, and digital files introduce new cybersecurity risks. We cannot close your business account Retained Earnings on Balance Sheet until you have filed all necessary returns and paid all taxes owed. If you have one or more employees, you must pay them any final wages and compensation owed.