Document Retention

What is document retention?

Document retention is the practice of keeping business records for required or recommended periods before destruction. Different document types have different retention requirements based on tax law, statute of limitations, and business needs. A document retention policy defines how long each category of records must be kept, where they are stored, and how they are eventually destroyed.

Standard retention periods

Tax returns and supporting documentation should be kept for seven years. Payroll records require at least four years. Employment tax records need to be kept for four years after the tax becomes due. Corporate records like articles of incorporation and meeting minutes should be kept permanently. When in doubt, keep longer. Storage is cheap compared to the cost of missing documents when needed.

Secure destruction

When retention periods expire, destroy documents securely. Shred paper containing sensitive information. Wipe electronic storage properly before disposal. Document the destruction with dates and responsible parties. Never discard records that might be needed for pending or anticipated litigation, regardless of standard retention periods. Legal holds override normal destruction schedules.