Brady and Associates, LLC

Serving your financial needs today and tomorrow

Document Retention

What records do we keep?  Upon completion of all of our services, bookkeeping, financial statement compilation, payroll, business or personal tax return we return all of your original source documents to you for filing along with the finished product.  It is the clients responsibility to keep all pertinent records.  We strive to keep a copy of all compiled financial statements, compilation reports, tax returns, as well as copies of  supporting documents that we feel are critical to the understanding of the final product for three years from the completion date.  These may be maintained as a paper or electronic copy.    These guidelines recognize the impracticality of adhering to rigid rules.

What records should you keep?  We recommend you keep all tax related documents for seven years from the filing date .  Business owners should keep all financial statement documentation that was used to prepare the financial statements, payroll tax return or business tax return.   

· Business Taxes:  Keep all business tax return supporting documents for 7 years from the return filing date.  The following are some examples of the records you should keep

· Gross receipts/Income:  Cash register tapes, Bank deposit slips, Receipt books, Invoices, Credit card charge slips, 1099-MISC

· Purchases - items you buy and resell to customers:  Canceled checks, Cash register tape receipts, Credit card sales slips, invoices

· Expenses costs other than purchases:  Canceled checks, Cash register tapes, Account statements, Credit card sales slips; Invoices, Petty cash slips for small cash payments

· Travel, Transportation, Entertainment, and Gift Expenses:  Cancelled checks, Credit card receipts, You must be able to substantiate certain elements of the expenses such as the purpose of the expense

· Assets – Machinery, equipment and furniture: When and how you acquired the assets, Purchase price and invoice, Cost of any improvements, Deductions taken for depreciation (including computation), Deductions taken for casualty losses, How you used the asset, When and how you disposed of the asset, Selling price, invoice and expenses of sale, Real estate closing statements

· Employment Taxes:  There are specific employment tax records you must keep. Keep all records of employment taxes for at least seven years after filing the 4th quarter reports for the year. Records should include:

· Your employer identification number

· Amounts and dates of all wage, annuity, and pension payments.

· Amounts of tips reported, and allocated tips.

· The fair market value of in-kind wages paid.

· Names, addresses, social security numbers, and occupations of employees and recipients.

· Any employee copies of Form W-2 that were returned to you as undeliverable.

· Dates of employment.

· Sick or injury pay, the amount and rate of payments you or third-party payers made to them.

· Copies of employees  income tax withholding allowance certificates (W-4, W-4P, W-4S, and W-4V).

· Dates and amounts of tax deposits you made.

· Copies of returns filed.

· Records of fringe benefits provided, including substantiation.

 

For additional information, refer to www.IRS.gov  Recordkeeping for Employers;  Publication 15, Circular E Employers Tax Guide.; to Publication 583,  Starting a Business and Keeping Records, Publication 463, Travel, Entertainment, Gift, and Car Expenses