Filing System

Maintain > Filing System

There are no IRS guidelines regarding a filing system – you just have to be able to find your records in an audit. Your filing system should be organized as follows:

  • Perpetual Files contain documents covering more than one year that are not transaction based. At some point, based on your determination, these can be stored out of reach or off premise.
    • Employees – human resource documents, personnel files
    • Customers – contracts, warranties
    • Insurance – policies and audits
    • Vendors – contracts, warranties, service agreements
  • Annual Files contain documents relating to a specific time period and most documents are transaction based. A good rule is to store previous year and current year on premises, all other years can be stored out of reach or off premise.

 

 

    • Payroll – time sheets, payroll reports from service company, payroll tax returns. Use the banking file system for your payroll files, using monthly divider tabs (see video).
    • Other taxes – sales and use tax, fuel taxes, etc.
    • Corporate income taxes – tax returns, 1099s from customers, charitable donation receipts
    • Miscellaneous – 1099s to your vendors