Why This Matters

Keeping records too briefly can create problems if you need to support a tax return, verify an asset purchase, respond to a notice, or answer a payroll question.

On the other hand, keeping every document forever without a system can create unnecessary clutter.

The goal is to have a reasonable retention policy based on the type of record.

Common Mistakes

• Throwing away tax records immediately after filing

• Discarding asset records while the business still owns the asset

• Keeping no documentation for old loans or major purchases

• Assuming digital records do not need organization

• Treating every type of record the same

Harvest’s Recommendation

Organize records by category and year.

Keep tax returns and supporting documentation together, and retain important permanent records separately.

For items such as real estate, equipment, ownership documents, or major legal agreements, keep the supporting records for as long as they remain relevant to the business.

Good to Know

Record-retention rules can vary depending on the document and the situation.

Some records may be needed long after a tax return is filed, especially when they relate to assets, payroll, ownership, or legal obligations.

When It’s Time to Get Help

Talk with your accountant if:

• You are unsure what older records can be destroyed

• Your business owns significant assets

• You are cleaning up years of historical files

• You have received a tax notice

• You are selling or closing a business