How Long to Keep Business Records After Closing Your Business

Another great resource is your business bank account, which shows your income and transactions. Banks vary in terms of how long they allow you to access online statements, so it’s a good idea to download your statements each year. When you’re running a small business, you have myriad things to worry about on a daily basis, so keeping detailed records may be the last thing on your mind. The IRS, however, requires that you maintain key records for specific lengths of time. It’s crucial to hang onto records that reflect your income and deductions in case your business is audited, and also to protect yourself and your business against any legal or insurance issues.

The IRS and Small Business Administration (SBA) recommend you keep key business documents on file long after your business closes. The SBA and many state agencies recommend that you keep most of your business records for at least seven years after closing. However, many of the specific time requirements depend on the type of document and individual state requirements.

Electronic Storage

A small business attorney can give you guidance that’s suitable for your business and the state in which it operated. Typically, the IRS will only audit taxes from the past three years. Make sure to file your taxes promptly and accurately and keep business records connected to your income and expenses. The Internal Revenue Service (IRS) requires businesses to maintain careful records to verify their income and expenses.

To comply, you’ll need to keep hiring records on each position for at least one year from the date you made your hiring decision. If you do end up going the paperless route, remember to keep a backup copy of your documents in a secure second location, like a password-protected hard drive, or a secondary cloud storage service. If your bank doesn’t have online banking, it’s best to hang on to bank records for three years. In this guide, we’ll walk you through which records you’re legally required to keep, how long you should keep them, and how to make sure you don’t lose them. Keep employee records for seven years after the employee leaves the company.

Recordkeeping After Closing Your Business

Designed for business owners, CO— is a site that connects like minds and delivers actionable insights for next-level growth. Practical and real-world advice on how to run your business — from managing employees to keeping the books. If the CRA gives you permission to keep your records outside of Canada, you must make them available upon request in Canada for review by the CRA.

This will also come in handy if you claim a deduction or depreciation for equipment. Whether they’re digital or physical, some business and tax records need to be saved for several years. Some financial records might be used by the IRS or lenders, and you might need them for up to seven years. For Title VII and ADA, the requirements kick in when you have 15 or more employees; it’s 20 or more employees for ADEA. If your company meets these requirements, you’ll need to keep all hiring records for each position for at least one year from the date of the hiring decision.

Other key business records to keep

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Thankfully, business software platforms enable you to keep business records electronically and generate reports on the fly, simplifying your record-keeping process. Tax time might be the most important time for business recordkeeping, how long to keep business records but taxes aren’t the only reason you should be keeping all of those documents. You should keep employment tax records for at least four years after the date that payroll taxes become due, or are paid (whichever is later).

You can toss most monthly bills after you pay them, or after the payments have credited to your bank statement. If you end up needing to go back to verify anything, see if you can access past bills through online account access. Many companies keep past bills and invoices available online for the past few months or longer.