It’s just around the corner. I know you probably didn’t want to hear that, but it’s true.
Taxes. Not Death and Taxes. Just taxes, hopefully. Both are inevitable, but thankfully only one will be our topic for today.
If you own a small business, you are busy! You probably thought hiring an accounting firm to handle your taxes would keep you from ever having to interact with the Internal Revenue Service ever again. While that may be the case, your accountant will still want you to make sure you’ve kept all necessary receipts and records needed to fill out the lengthy, yearly (and sometimes quarterly) forms. Also, don’t forget you have to keep certain records for a period of time following each tax season.
Below you will find some handy advice to keep you in the good graces of the IRS. Keep in mind, no matter what the government says about keeping files on record, you have place to store documents right here at A-1 Self Storage.
According to the IRS, the length of time you should keep a document depends on what it is and where it’s from. About as clear as mud, right? Let’s sort that out a bit. This means all records of income, deductions, and credits on your tax return should be kept until the period of limitations for that specific tax return have run out. That is the period of time during which you can legally amend your return to claim a credit or refund.
To ensure your small business (and you personally) receives everything you’re entitled to, it’s important to keep ALL filed tax returns. Yes, that can be a lot of paper if you’ve been in business a while. No sweat though, A-1 Self Storage can help you rent a cost-effective place to store these files year after year.
Below is some great information from the IRS on how long you need to plan to keep records safe and secure.
Period of Limitations that apply to income tax returns
- Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
- Keep 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.
- Keep records indefinitely if you file a fraudulent return.
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
So... Basically, Keep Everything?
Once your records are no longer needed for tax purposes, the IRS suggests not discarding them until you’ve checked to make sure you no longer need to keep them for other purposes. Sometimes insurance companies or creditors will require you to keep these documents longer than the IRS. Also, keep in mind property documents are vital both for personal and business purposes. Keeping property documents both while you have ownership as well as when you have sold is important.
Of course, you need to hold on to important tax documents, contracts, and various paperwork even if you don’t own your own business! Everyone should always protect their assets by keeping important legally binding documents secure.
This space doesn’t have to just be for documents either! You can use this important storage space for other things as well, things made of paper. Books, photographs, party supplies etc. that you may want to hold onto. Wouldn’t it be nice if these seldom looked at or used items were stored somewhere dry, secure, and out of the way? We think so. And self storage is the perfect solution.
If the IRS has a question, don’t worry about needing documents at a moment’s notice. Consider making copies that you can keep at home while storing the originals in a self storage unit. “Backing up” paperwork like this is also a way to ensure that all your irreplaceable documents are safe from fire or water damage in the event of a natural disaster.
Think of every time you’ve gone searching for that certain item and all the time you wasted due to being unorganized! Then, if you found it, maybe it was torn, wrinkled, or damaged from the weight of all the other things on top of it!
“There’s a place for everything and everything in its place”, maybe you heard someone say that to you as a child. Well, this is an excellent way to do just that. Create an inventory of what you have and keep everything looking as good as the day you got it by using self storage.
You can lessen a lot of stress associated with tax season by not attempting to fit everything into your limited home storage space. When tax time rolls around, it seems like everyone is scrambling to find the necessary documents. Don’t be one of them! Save time, energy, and resources by keeping everything orderly in an A-1 Self Storage unit.