Running a business means dealing with lots of paperwork. It might feel like a good idea to keep every piece of paper just in case you need it later. But holding onto documents for too long can make your business vulnerable to fraud. Fraudsters could get access to your account details, client information, and more. Some business documents can be shredded fairly soon after you’re done with them, while others should be kept for a while.
Here’s a breakdown of common business documents and how long you should keep them before shredding:
Keep your bank and credit card statements for about a year. Many banks offer online statements, so you can shred the paper ones sooner if you like. Only keep them longer if you need them for your taxes.
Hold onto tax documents for seven years. This gives you time in case you need them to sort out any issues with the IRS. This includes your tax returns and any supporting documents.
If you have more than 15 employees, you legally need to keep all employee records for at least a year. This includes job applications, promotions, test results, layoffs, and even records for applicants you didn’t hire. Some health records need to be kept longer, so ask your HR Representative about those. It’s often a good idea to keep employee records longer, especially if there were any claims against your business.
Keep all employee tax records for at least four years, as recommended by the IRS. This protects your business in case an employee raises questions in the future. These records include employee IDs, personal info, salary details, tax returns, W-4 forms, and benefit records.
Keep all documents related to business property for at least seven years after you no longer own it. This includes receipts for land, buildings, vehicles, and equipment. After seven years, you can shred these documents, except for deeds and titles, which you should keep indefinitely.
If you have paperwork with customer information, consider shredding it too. Think about what personal info the documents contain and how long you need to keep it. Always store private customer info securely to avoid risks for both you and your customers if it falls into the wrong hands.
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