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MAY/JUNE 2022 WWW.HEALTHCARENEWS.COM 37
HEALTHY OUTLOOK
How Long Should Records Be Kept?
There Is No One-size-fits-all Answer to This Important Question
By DEB KAYLOIR
time to purge old files and business tax records. While it may be tempting to simply throw away
old records and business documents, it’s important to be mindful of the different laws and regulations surrounding document retention. Depending on the type of business, there may be certain records that must be kept for a minimum number of years. In
“By taking the time to understand the different laws and regulations surrounding document retention and business tax records, businesses can ensure that
they are in compliance with all
applicable laws and minimize the risk of liability.”
t’s that time of year again! Tax filing season has come to a close, and business tax returns have been filed. For many businesses, this is also a
Tax Records
While it may be tempting to clear out the clutter and shred old business tax records, tax returns and business documents, it’s important to know what to keep and for how long. Although actual tax returns should be kept permanently (including canceled checks from tax payments), the supporting docu- mentation from previous years should be kept until the chance of an audit passes.
Accounting Systems
Audit reports and financial statements from accountants, trial balances, general ledgers, bank statements, journal entries, cash books, charts of accounts, check registers, subsidiary ledgers, and investment sales and purchases should be kept per- manently. Other records, such as payable and receiv- able ledgers, bank reconciliations, bank statements, and cash and charge slips, and any other supporting documents should be retained for seven years.
For certain assets (residences, real estate, stocks, etc.), all statements, invoices, and purchase docu- ments that substantiate cost should be kept, typically for seven years after the asset is sold. Depreciation schedules and asset-inventory records should be kept permanently.
Corporate Records
For any small business, it is important to retain certain corporate records. This ensures that the busi- ness is in compliance with annual reports, articles
of incorporation, stock ownership and transfers, bylaws, capital-stock certificates, dividend registers, canceled dividend checks, and business licenses and permits. By keeping these records up to date and in a safe place, the small business can avoid costly penal- ties or legal action. Additionally, having accurate and complete records can help the small business to keep track of its finances and make informed decisions about its future.
Employee Records
As a small business owner, you are responsible for keeping accurate records for all of your employees.
Please see Outlook, page 38
other cases, there may be no legal obligation to keep records at all.
However, even in these situations, it’s often best to err on the side of caution and retain documents and keep business tax records for a longer period of time. By taking the time to understand the different laws and regulations surrounding document retention and business tax records, businesses can ensure that they are in compliance with all applicable laws and minimize the risk of liability. Here are some things to keep in mind when asking how long to keep business records.
Generally speaking, you should keep any tax return and supporting documentation until
the statute of limitations expires. For most taxpay- ers, this means keeping records for at least three years. However, there are some situations where you should keep records for longer. For example, ifyoufileaclaimfora loss carryback, you’ll need to have records from the previous year on hand.
The same is true if you’re self-employed or have income from rental properties; in these cases, you should keep records for at least seven years. If
you record depreciation expense on capital assets, invoices and any other purchase agreements should be maintained for at least seven years after that asset is sold. No limit exists if you failed to file or filed a fraudulent return. As such, it is wise to keep business tax records for at least seven years after a return is filed. Ultimately, it’s up to you to decide how long to keep tax records, but it’s always better to err on the side of caution.
AMA Slams Court Ruling on Abortion
The American Medical Assoc. issued the following statement on the U.S. Supreme Court’s recent ruling to overturn Roe v. Wade:
“The American Medical Association
is deeply disturbed by the U.S. Supreme Court’s decision to overturn nearly a half century of precedent protecting patients’ right to critical reproductive health care — representing an egregious allowance
of government intrusion into the medical examination room, a direct attack on the practice of medicine and the patient-phy- sician relationship, and a brazen violation of patients’ rights to evidence-based repro-
ductive health services. States that end le- gal abortion will not end abortion — they will end safe abortion, risking devasting consequences, including patients’ lives.
“Today’s opinion shifting reproduc- tive health decision-making to lawmakers opens a deep political rift between states over access to reproductive health services that places sound medical practice and the health of patients at risk. State restrictions that intrude on the practice of medicine and interfere with the patient-physician relationship leave millions with little or no access to reproductive health services while criminalizing medical care.
“Access to legal reproductive care will be limited to those with the sufficient resources, circumstances, and financial means to do so — exacerbating health in- equities by placing the heaviest burden on patients from Black, Latinx, Indigenous, low-income, rural, and other historically disadvantaged communities who already face numerous structural and systemic barriers to accessing health care.
“In alignment with our long-held position that the early termination of a pregnancy is a medical matter between the patient and physician, subject only to the physician’s clinical judgment, the patient’s
informed consent, and access to appropri- ate facilities, the AMA condemns the high court’s interpretation in this case. We will always have physicians’ backs and defend the practice of medicine, we will fight to protect the patient-physician relationship, and we will oppose any law or regulation that compromises or criminalizes patient access to safe, evidence-based medical care, including abortion. As the health of millions of patients hangs in the balance, this is a fight we will not give up.”