Seven years. Your business records must be kept for seven years because the Social Security Administration requires any discrepancy to be resolved anytime within this seven year window. Also, the IRS and any state agencies will audit within the seven year window. Keep all Federal, State and local returns along with all supporting documents for seven years as well. Real Estate and stock market transaction records should also be kept. Consider keeping your files in a safe deposit box or other safe place outside your home.  

According to the IRS: You may choose any record keeping system suited to your business that clearly shows your income and expenses. The Tax Courts standard for determining that a bookkeeping system is appropriate: “Does the bookkeeping provide sufficient data for the taxpayer to make informed business decisions?” The type of business you are in obviously affects the records you need to keep. A thorough record keeping system should include a summary of your business transactions typically through accounting journals and ledgers. Your books must show your gross income, as well as your deductions and credits. For most small businesses, online systems, such as QuickBooks, are a great way to connect your bank accounts and track this information. 

Any professional you choose should not only have the technical knowledge required but should also treat you with respect. Does your CPA and advisor take time to listen to you? Does your CPA and advisor return your calls in a timely manner? Do you feel comfortable asking your CPA and advisor a question? When you need a professional in the region who will make you their top priority, call The Walls Group today!

As required, a CPA has demonstrated professional competence by passing a rigorous examination and meeting high standards of education. In addition to this, they must meet strict continuing education requirements, undergo peer review, and adhere to a stringent set of ethical standards offering a higher standard of services and professionalism. 

Regular review of your financial statements at least once a month or each quarter allows you to monitor business performance, manage cash flow effectively, and make informed decisions that support growth and long-term success.