March 14, 2016

Financial Records Retention: What Should You Keep?

by: Graham Blackburn, CPA


Thankfully, that is not true.  Maintaining accurate financial records can be a daunting task.  So we organized a general guideline on which records to keep and for how long.

General Rules of Thumb

Businesses and individuals should retain copies of filed tax returns indefinitely. Please safeguard these records.  If you prefer to keep your tax returns electronically we can provide a secured pdf copy.  However, you should be sure to backup your computer records effectively if you choose to keep only electronic records.

Tax Matters

The IRS will not audit returns after three years.  Though as with most things tax-related, there are exceptions that can extend the IRS audit period.  We included a link to the IRS webpage concerning record retention.

What about Non-Tax Related Business Records?

Certain business documentation should be kept indefinitely.  This includes:

  • Articles of Incorporation
  • Bylaws
  • Patents, copyrights, trademarksHobe_Record2016
  • Financial statements  
  • General ledgers and year-end trial balances

Other documentation varies based on the nature of the business.

What does this mean for Ohio?

Ohio’s statute of limitations is 4 years, meaning they are permitted to examine your Ohio income tax returns for one year longer than the IRS.  We recommend that our Ohio business and individual clients retain all documentation for 4 years in the event of exam.  Many states have statutes that differ from the IRS regulations.  Be sure to check the rules in your specific state before disposing of any records.

Final Thoughts

There are no rules from the IRS when it comes to how you maintain your records, only that you be able to deliver documents promptly should they ever ask.  It is extremely helpful to maintain an efficient record-keeping system, whether you prefer to keep hard copies or electronic records.

It is important, once you have made the decision to dispose of documentation, that you shred it thoroughly before throwing it away.  These documents contain a great deal of personal information that you don’t want to fall into the wrong hands. Should you make the decision to keep your records in an entirely electronic format, be sure an adequate and secure backup system is in place to avoid a catastrophic loss of important information should there be equipment failure.

Remember, we’re here to be your financial and tax partner all year round!  If you would like to discuss your individual or business situation, please give us a call at 216.524.8900.

Also, don’t forget to download our records retention PDF and keep it handy in your office or home.

To download the Records Retention PDF, please enter your name and email address below:
[email-download download_id=”725″ contact_form_id=”732″]


Hobe & Lucas Certified Public Accountants, Inc. is a full-service accounting and business consulting firm dedicated to providing clients with exceptional value.

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Investment advisory services are offered through Avantax Planning PartnersSM. Commission-based brokerage services are offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Insurance services offered through licensed agents of Avantax Planning Partners. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019. The Avantax entities are independent of and unrelated to Hobe & Lucas Certified Public Accountants, Inc.

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