Record-Keeping Rules: What Kind of Records do I Need to Keep?

Following is a transcript of this podcast episode, with audio/video below.

Welcome to the Two-Minute Treasurer’s Tip Podcast. I am your host, Cyndi Meuchel, and I’m the Co-Owner of MoneyMinder, where our goal is to make your life as treasurer easier. That’s why we share these tips and tools. However, remember every group operates differently, so I encourage you to take what works for you and disregard anything that I say that may not be helpful to you.

Today I’m answering the following question: What kinds of records do I need to keep and for how long? Mike writes, “Much to my surprise, the previous treasurer left several boxes of paperwork from previous year activities at my door. There doesn’t appear to be much organization to it. I suspect she just added her stuff to what was there without ever looking through the box. I don’t want to do this to the next treasurer.

Can you tell me what I need to keep and for how long so I can organize this mess without worrying that I’m throwing something important away?” Gosh Mike, that’s a good question, and unfortunately this is way more common that you’d think.

Here’s my advice. There are two kinds of things you’re gonna wanna to look for in that box. One is documentation around transactions and tax year stuff, and the other is what I often refer to as critical documents. So for the documentation around transactions, you’re gonna wanna keep all records that support any income or expenses, um, until the statue of limitation for that return runs out, and generally that’s about three years after the date the return was due or was filed, whichever is later. So you are required to keep all books, all records, that includes receipts, in order to comply with the IRS.

The group I’m treasurer for keeps a few extra years beyond that just for good measure. I also keeps things like bank statements, bank correspondence, voided checks, 1099s, financial reports, annual reports, 990 tax returns, and any other paperwork that pertains to a particular year. That way, in the very unlikely event that I’m audited, I can substantiate any return that we filed.

Now I also mentioned critical documents. These are like your IRS Letter of Determination, bylaws, Articles of Incorporation, and any other founding documents. These don’t necessarily have anything to do with a particular financial year, but you’re gonna wanna keep these permanently. I recommend a three-ring binder. I also recommend scanning those and uploading them to the Documents section in MoneyMinder. That’s what I do for my group and that makes it super easy when I need to send out an electronic version of any of those documents to someone who might need it.

So, when it comes to those tax year documents, you might put those in a box and write the tax year on the outside. So each year goes in its own box, and then, that way as things age out, you can easily locate an old box of documents and shred that old paperwork without having to sift through it again. So I’m hoping that you are seeing that this might be a kinder way to pass on that legacy paperwork to future treasurers. Hopefully you do.

That’s it for today. Thanks for listening! If you have questions you’d like answered, please email me at [email protected]. Again, my name is Cyndi Meuchel, and this is the Two-Minute Treasurer’s Tip.

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