document management

How Long Should I Keep Records?

The length of time you should keep a document depends on the action, expense, or event the document records. You must keep your records as long as they may be needed to prove the income or deductions on a tax return.

The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax. The below information contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.

Note: Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return.

  1. You owe additional tax and situations (2), (3), and (4), below, do not apply to you; keep records for 3 years.
  2. You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years.
  3. You file a fraudulent return; keep records indefinitely.
  4. You do not file a return; keep records indefinitely.
  5. You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
  6. You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years.
  7. Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

The following questions should be applied to each record as you decide whether to keep a document or throw it away.


Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the bases of the property you gave up, increased by any money you paid. You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.


When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.

record keeping

How Long Should I Keep Employment Tax Records

You must keep all of your records as long as they may be needed; however, keep all records of employment taxes for at least four years. Keep all records of employment taxes for at least four years after filing the 4th quarter for the year. These should be available for IRS review. Records should include:

  • Your employer identification number.
  • Amounts and dates of all wage, annuity, and pension payments.
  • Amounts of tips reported.
  • 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.
  • Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them.
  • Copies of employees’ and recipients’ income tax withholding allowance certificates (Forms W-4, W-4P, W-4S, and W-4V).
  • Dates and amounts of tax deposits you made.
  • Copies of returns filed.
  • Records of allocated tips.
  • Records of fringe benefits provided, including substantiation.

Budgeting Process – More Than Numbers

As the year draws to a close, many of you have started planning for next year. Your budgeting process is a very important tool in planning for, and ultimately achieving, your business goals. A budget is your business plan in writing and spelled out in dollars. The purpose is to allocate resources and control spending so every decision made drives the company in achieving its goals.
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Pay Personal Expenses With Personal Funds

Recent developments in Wisconsin law under the Uniform Fiduciaries Act prompt every business to reevaluate accepting company checks for payment of goods or services provided for a customer’s personal use. Vendors or contractors could be held 100 percent liable to relinquish any monies received in payment for personal goods and services if found to have been paid out of embezzled company funds. Read More >

Proposed Lease Accounting Changes Could Change Your Company’s Financial Picture

In August 2010, FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) released a joint exposure draft that would dramatically change lease accounting for both lessees and lessors by requiring all leases to be recognized on the balance sheet. Current standards allow leases classified as “operating” to be expensed as lease payments are made with no effect on the company’s balance sheet. The proposed change would eliminate operating leases and require substantially all leases to be recorded on the balance sheet as financings. Read More >

Age-Related Milestones

Below are important age-related tax and financial planning milestones that you should keep in mind for you and your family:

Ages 0-23: Kiddie Tax rules potentially apply to children’s investment income. A child’s investment income below the $1,900 threshold is taxed at favorable rates. However, excess income may be taxed at parent’s income tax rate.
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Mergers & Acquisitions – State Of the Market

CGK Investment Banking has changed its name to CGK M&A Advisors to help better identify CGK as a provider of merger & acquisition advisory services to privately held, middle market companies around the world. As dedicated M&A professionals, CGK specializes in helping clients buy and sell companies. Read More >

Retirement Plans-Meeting Your Fiduciary Responsibilities

Retirement plans offer great benefits to both employees and business owners. However, retirement plans require a certain level of administration and management that are required by the Employee Retirement Income Security Act (ERISA). Read More >

U.S. Companies Encouraged To Compete Globally

Small to mid-sized companies are encouraged to increase their international business to help U.S. companies compete in the global marketplace. Numerous tax consequences as well as tax benefits of international business exist. The structure of your export activity is important to maximize tax benefits using an Interest Charge – Domestic International Sales Corporation (IC-DISC). Read More >


Importance of the Annual Meeting

One of the requirements for maintaining a corporation’s existence (and the liability protection that it affords) is that the shareholders and Board of Directors must meet at least annually. Although most people view this requirement as a necessary evil, it does not have to be a waste of time. An annual meeting, and the corresponding minutes generated, is an important tool to support your company’s tax positions. In the event of a tax audit, an IRS auditor is required to review the corporate minutes.

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