At the end of the year, it is time to store away documents and get ready for the next year. But, how long do you need to keep those files?
Even in the era of electronic records, it is good practice to establish or revisit your policy on how long documents should be retained.
Also, remember: Employee and guest data should be safeguarded carefully. Encrypt and password protect electronic records, be careful about which individuals have access to the electronic documents, and keep paper records within areas of controlled access.
TAX RECORDS – 4 TO 7 YEARS
Revenue forms such as transcript sheets, cash register receipt tables, folios, financial statements, complete bookkeeping systems such as cash sheets, general ledgers, profit and loss records, must all be kept for four (4) years. This also includes registration cards and folios.
Any records that relate to payroll such as time cards, payroll sheets or forms, tip slips for tip credit, employment taxes, etc., must be kept for four (4) years after the date the tax is due or paid, whichever is later.
Anything that relates to property value, ad valorem taxes, franchises, tax deeds, etc., must be kept indefinitely, or until the property is sold.
Records related the Texas franchise tax on a corporation must be kept seven (7) years.
State and local hotel occupancy tax records must be kept for four (4) years. This includes hotel tax exemption certificates and any required backup documentation.
All records for sales tax must be kept for four (4) years.
IRS federal income tax records:
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
- Keep personal records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later if you file a claim for credit or refund after you file your return.
- Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
- Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
- Keep records indefinitely if you do not file a return.
OSHA – 5 to 30 YEARS
Form 300 filings must be kept for a minimum of five (5) years. Records of employees being treated for HAZCOM of Blood Borne Pathogens must be kept for thirty (30) years following employment.
U.S. LABOR DEPARTMENT RECORDS – 3 YEARS
The U.S. Department of labor requires each employer to preserve for at least three (3) years payroll records, collective bargaining agreements, sales and purchase records.
These records must be open for inspection by the Division’s representatives, who may ask the employer to make extensions, computations, or transcriptions. The records may be kept at the place of employment or in a central records office. Additionally, the Texas Workforce Commission requires employers to maintain employment records for four (4) years.
US CIS FORM I-9, EMPLOYMENT ELIGIBILITY VERIFICATION
Employers must retain an employee’s completed Form I-9 for as long as the individual works for the employer. Once the individual’s employment has terminated, the employer must determine how long after termination the Form I-9 must be retained, which is either three years after the date of hire, or one year after the date employment is terminated, whichever is later. Forms I-9 can be retained either on paper, “microform,” or electronically.
TEXAS ALCOHOLIC BEVERAGE COMMISSION – 4 YEARS
All records pertaining to liquor licenses, sales tax records from package stores, mixed beverage permits and private club records must be kept for four (4) years. The records, in general, must reflect the total gross receipts from the sale or service of alcoholic beverages and those associated services that are subject to the gross receipts tax.
If you have questions regarding record retention, please call Justin at THLA at 512-474-2996, or email him at .