Re: How long?

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Posted by Julie Signore on November 13, 2000 at 13:23:35:

In Reply to: How long? posted by Maggie Adelson on November 13, 2000 at 00:57:03:

Aloha Maggie....

GREAT question!! Maggie, there are several variables when it comes to *specific* bills/receipts & their *specific* retentions.

First of all, if the receipt is used for tax deductable purposes...it generally needs to be kept in a backup file (or archive box) for 3 years.

When it comes to financials ...you need to keep registers, checks, account summaries etc...for 7 yrs.

ALL tax returns submitted to the IRS (schedules etc...) or local government (excise taxes paid etc..) need to be maintained forever in an archive file.

You mentioned medical receipts....if they are used in compiling taxes -- they fall into the 3 yr. category. If not -- then you don't need to keep them.

Utility bills....if they are not used for a tax deduction for business...then just keep one month at a time. When you receive the next statement indicating your payment was received -- toss the prior month.

If you are involved in a 1031...ALL records for the ENTIRE life of the 1031 need to be maintained until 3 yrs. after the last piece of property is sold & the 1031 is no longer rolled-over.
ie: suppose you bought property in 1991 under a 1031. Then sold that property in 1993, purchasing a new piece. Once again, you sell it in 1998 & purchase a new one. In 2001 ...you sell that property & no longer exercise the 1031 -- what this means is that ALL the properties, papers, receipts etc...from 1991 up until 2001 need to be archived until 2004!

As you see, there are different scenarios ...depending on the type of document & how it is used.

Once last thing...I highly recommend individuals to contact their professional associations for the exact retention on business records. It varies from field to field. ie: the AMA tells practitioners to maintain records for 5 years.

If you have any other *specific* concerns -- feel free to post another question. :)

Ultimately, I recommend you contact your CPA/tax attorney to find out what their suggestions are as well. A long time ago the *magic number* was 7 yrs. As I stated above ...this pertains to financial records now -- yet some people fear tossing the papers & keep it all unnecessarily!

There are horror stories abound from businesses that setup a retention procedure for their offices...& *some* employees take it upon themselves & decide to do it differently. This can actually cause more damage than good if retention policies are not kept *equally* by all involved in the office.

Hope something here helps!

Much Aloha,

Julie Signore -
President: The PHOENIX Organizational Consulting Service
CEO: 1,2,3 SORT IT Organizing Solutions -- Innovative Tools
NSA Member, NAPO Member

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Comments:
: Aloha Maggie....

: GREAT question!! Maggie, there are several variables when it comes to *specific* bills/receipts & their *specific* retentions.

: First of all, if the receipt is used for tax deductable purposes...it generally needs to be kept in a backup file (or archive box) for 3 years.

: When it comes to financials ...you need to keep registers, checks, account summaries etc...for 7 yrs.

: ALL tax returns submitted to the IRS (schedules etc...) or local government (excise taxes paid etc..) need to be maintained forever in an archive file.

: You mentioned medical receipts....if they are used in compiling taxes -- they fall into the 3 yr. category. If not -- then you don't need to keep them.

: Utility bills....if they are not used for a tax deduction for business...then just keep one month at a time. When you receive the next statement indicating your payment was received -- toss the prior month.

: If you are involved in a 1031...ALL records for the ENTIRE life of the 1031 need to be maintained until 3 yrs. after the last piece of property is sold & the 1031 is no longer rolled-over.
: ie: suppose you bought property in 1991 under a 1031. Then sold that property in 1993, purchasing a new piece. Once again, you sell it in 1998 & purchase a new one. In 2001 ...you sell that property & no longer exercise the 1031 -- what this means is that ALL the properties, papers, receipts etc...from 1991 up until 2001 need to be archived until 2004!

: As you see, there are different scenarios ...depending on the type of document & how it is used.

: Once last thing...I highly recommend individuals to contact their professional associations for the exact retention on business records. It varies from field to field. ie: the AMA tells practitioners to maintain records for 5 years.

: If you have any other *specific* concerns -- feel free to post another question. :)

: Ultimately, I recommend you contact your CPA/tax attorney to find out what their suggestions are as well. A long time ago the *magic number* was 7 yrs. As I stated above ...this pertains to financial records now -- yet some people fear tossing the papers & keep it all unnecessarily!

: There are horror stories abound from businesses that setup a retention procedure for their offices...& *some* employees take it upon themselves & decide to do it differently. This can actually cause more damage than good if retention policies are not kept *equally* by all involved in the office.

: Hope something here helps!

:
: Much Aloha,

: Julie Signore -
: President: The PHOENIX Organizational Consulting Service
: CEO: 1,2,3 SORT IT Organizing Solutions -- Innovative Tools
: NSA Member, NAPO Member

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