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KristineS
08-31-2008, 11:18 PM
How long should you keep financial records. If I remember correctly, you're supposed to keep personal records for seven years. Is it the same for corporate records?

vangogh
09-01-2008, 12:31 AM
That's a good question. I wish I knew the answer. I was thinking 4 years for some reason, but I really don't know. I tend to save anything, but it would be nice to know when I can start getting rid of some things.

KristineS
09-01-2008, 07:15 AM
Hopefully someone who's a bit more knowledgeable in this area will jump on this thread and tell us.

Evan
09-01-2008, 06:06 PM
It depends on the purpose of the document in question. Ordinarily 4 years is sufficient, but keep your corporate tax returns indefinitely.

If you purchased a truck and depreciate it, you should keep the information for that truck for the life of your ownership of the truck + 4 years. Why not 4 years after it's done depreciation (let's assume you keep this truck awhile)? Upon selling or disposing of the truck, you're creating a capital gain/loss, and the IRS will want you to prove it.

The IRS does provide some help here:
How long should I keep records? (http://www.irs.gov/businesses/small/article/0,,id=98513,00.html)

As for the regular day-to-day stuff, you only need to keep the information related to your income and expenses. So that little non-detailed credit card receipt you got in addition to a return receipt for your product -- you can toss it. But you should keep the return receipt if that is an actual expense you'll claim on your tax return. It can be easy to store these aside, and at the end of the month, staple the receipts to the credit card statement and mail a check.

KristineS
09-01-2008, 06:58 PM
Evan, that's good to know. I tend to keep everything related to personal expenses. Sounds like maybe some of that isn't necessary.

Evan
09-01-2008, 08:28 PM
What does not seem necessary?

KristineS
09-01-2008, 10:00 PM
I keep everything. All the receipts, bank statements, check stubs, everything. And I keep it all for a long time. I have check stubs from jobs I had 10 years ago. That seems a little excessive.

Evan
09-01-2008, 11:22 PM
Check stubs you can get rid of at the end of the year, after you receive your W-2. You may be best keeping those W-2s though, as that is really your only proof (though now the SSA does send out statements when you're older) of your SS contributions.

Bank statements, only if they're related to taxes, should be kept. Same with receipts. Otherwise the $50.00 check to your hairdresser or $4.00 latte you bought is not important.

KristineS
09-02-2008, 11:15 AM
That's what I mean by saying I can probably clean out some of this stuff and shred it. So that's good to know, even though it would have been even nicer to know before I moved all of it to the new place.

Should have thought to ask then.

Evan
09-02-2008, 06:45 PM
...or when you bought all those boxes or plastic containers to hold all this stuff in.

Do you ever have any "Big Shred It" events? It's for residential use, but you know a few commercial things slip in there. But that's be a great time to bring boxes of junk documents you need shredded. They tend to be free. A local news channel sponsors it here in Rhode Island. While I've never been, I do know I'd go if I had a lot of stuff. Just some food for thought!

vangogh
09-02-2008, 07:11 PM
I don't recommend the following, but it's a story that was shared by a friend about another friend.

This person would keep everything in boxes, which he dated. Every time he opened a box he'd cross out the old date and replaced it with the current date. It was a way to always know the last time he'd looked in the box.

Any time he came across a box that he hadn't opened in a year he threw it out without looking at it's contents. I guess he figured if a year went by without him needing anything in it he could do without it forever.

Very bad for record keeping. Very good for living in the moment.

Evan
09-02-2008, 07:57 PM
That is probably not the worst record keeping system -- but probably isn't long enough in many cases.

It'd probably be resourceful for common things, such as your own personal accounts. I wouldn't do it with corporate records.

vangogh
09-02-2008, 08:22 PM
I think it was really more about the usual stuff we collect in life and less about record keeping. The person in question was I think an artist and not likely a business person of any kind.

I'd still open the box before throwing it out.

Evan
09-02-2008, 08:28 PM
For memories? :-P

vangogh
09-02-2008, 11:03 PM
I wouldn't want to take a chance on throwing out something I wanted to keep. Years ago while going through a box I came across the title of a car I owned. Without looking I made the assumption it was for a car that had previously died on me and I just tore it up and threw it out. Turns out it was my current title at the time and I didn't realize until a few months later when I went to sell it.

It wasn't a big deal, but still annoying. I think it would be easy to throw things out that were important.

KristineS
09-03-2008, 01:53 PM
It definitely would be easy to throw out things that are important. I have a filing system and I always start out with neatly labeled files. Then things pile up and I just put them near the filing cabinet until I have time to file. If I just swooped up the pile because I hadn't touched it in a while and threw it away, I could throw out stuff I really needed.

orion_joel
09-05-2008, 12:41 AM
I think the standard requirement in Australia is 7 years, however the point that you make Evan is a very valid one i think, that for depreciation you should look at keeping the records for that period after you have disposed of the asset.

I really started to look at what i was actually keeping more so because of the volume of paperwork that i had from both business and work in just 8 years. i sort of realized some things just are not required, like payslips, once you have the final group certificate, which is a summary of the payslips for the year.