Closing down my business

Throwing away paperwork and need to know how many years back of tax papers do I keep? What a choir, dad started in 65, partners since 85, outright owned since 93. A lot of memories going in the dumpster, very hard. Next thing is to sell the materials and machinery. Might have to take to scrap yard.

Better ask your accountant that question.

I agree. However, mine says 7 years of back taxes filled, 3 tears for documents and such used to file your taxes.

What kind of business, if you don't mind me asking?

Cabinets, millwork and general woodworking, (whatever $$ comes thru the door) I’m the accountant lol. I do have a tax guy, I do all the paperwork then hand to him and he fills out the forms. Sole proprietorship, one man band.

Found online.....seems pretty comprehensive.

According to the Internal Revenue Service, the required length of time to save business documents varies depending on what the item is and when the period of limitation on that item runs out. The minimum holding requirement for any document is two years, but there are some that must be kept permanently. If you've ever filed a fraudulent tax return, you must keep all records indefinitely.

Accounting Records

Financial records such as the accounts payable ledger, balance sheets, check register and general ledger will need to be kept permanently. Other records such as cash receipts, dividend checks, cost accounting records and accounts receivable invoices and ledgers will need to be kept between five and seven years. In addition, records such as bank statements, accounts payable invoices, payroll checks, canceled checks, earnings register, expense reports and labor cost records will need to be kept between two and three years.

Tax Records

With taxes, the length of time to keep records also varies. For example, annuity and deferred payment plans, depreciation schedules, dividend registers, inventory reports, tax bills and statements, tax returns, sales tax returns and pension returns will need to be kept permanently. Payroll tax returns will need to be kept at least seven years. Also, employee withholding, excise exemption certificates, manufacturing excise reports and retail excise reports will need to be kept for a minimum of four years.

Personnel Records

The recommended length of time to keep personnel records also varies. Records such as injury frequency charts and health and safety bulletins should be kept permanently. Accident reports, injury claims and settlements should be kept for 30 years. Employee insurance records should be kept for 11 years. Attendance records should be kept for seven years. Employee contracts should be kept for six years. Garnishments, applications and terminations should be kept for five years. Fidelity bonds should be kept for three years. Also, job descriptions, rating cards and time cards should be kept for two years.

Corporate Records

With the exception of surety bonds that need to be kept for three years and administrative records that need to be kept for 10 years, all other corporate records need to be kept permanently. The category of administrative records typically includes audit reports and classified documents. Common examples of corporate records include annual reports, authority to issue securities, capital stock ledger, charters, constitutions, bylaws, contracts, corporate election records, incorporation records, stock transfers, insurance policies, patents, trademarks and copyrights.

That's a tough business to be in right now. Good luck to you.

can try to auction the stuff off

I am in the process of deciding what to keep from my parts business, 40 years of buying, selling, using Mopar parts and in a couple months the dumpsters will be brought in. I am only keeping records for the last 4 years, everything else will make an awesome bonfire...

Good luck in your future endeavours.

If referring to me not much. I’ll be 74 this summer. Mainly finishing all the projects I have been on for 30 years. For a job I can run a mower at the golf course for $12 an hour plus free golf. A no brainer job, lol

I am not a golfer but that sounds like a pretty good deal to me.

Enjoy, you have earned it!

Have to be there at 6:30, that will be tough for me

2 words for you when selling PPE...

Depreciation Recapture

Have a friend that owns several businesses and many properties chock full of inventory he has collected. He contacted an auction company that specializes in online auctions. Last year his first auction cleared the major amount off of the largest property, and brought in an unexpectedly large amount of money. The biggest plus to having the auction was that buyers removed the items and he didn't have to pay for labor for removal, and most all was removed within a week of the sale.

I dont know. Theres a market for quality craftsmanship. Kinda different, but I'm having cedar shake replaced on my new (old) house. Guy qouted $20/ft on a 3000ft house. Thats just for labor. Then said $100/hr if any repairs or additional woodwork required. I've seen his work. He's an artist. Said he's 10weeks away from starting my job cause he's wrapping a 20,000sqft ranch. Said there is UNLIMITED work.

We have been looking at custom tables and live edge tables. Pricey. Some get to be 6 figures.

Just saw on youtube an ex junkyard or collection being auctioned off. All rusty / well abused. Guy cleared $850,000

When I closed my shop in 2018, my accountant told me I needed to keep pretty much everything concerning taxes for 7 years, the IRS can come back on you for that long and you need to keep the records to cover your butt incase of an audit

For the record, I thought when I closed my little shop was all done, my tax stuff regarding the business was also done. But 2 years later, stuff connected to the shop was still turning up that still effected my income. It was with that filing for the 3rd year things involved with my shop was actually finished.

Now, if I could just get Google, and those people offering to file for Covid employee kick back for my business, to quit calling me (neither of which I had anything to do with), life would be good

lol same here.

I never officially had a business in the brick and mortar building, but just found out today my retired accountant never even filed my transport business as an actual business with the IRS! My new accountant told me that today, and when I gave him the paperwork for my sold building he about had an attack. Seems I now owe the State of Illinoise $4k and the Feds $3800 for the privilege of owning that building...

First thing I tell people that ask about starting a business is save yourself the headache and find a CPA. My sister-in-law is a nanny for a CPA. He said he wouldn't be the right fit for me since he deals with comanies over $50M. He said most CPA's work in "brackets" for lack of a better term. He recommended one in the $1-5M "bracket" WHO HAS BEEN GREAT. They do my bookeeping monthy. Have access to my bank account and business credit card so they download and sort everything. Just ask a couple "what was that purchase?" occasionally. Probably spend less than $5000 with them and WELL WORTH IT. The first "accountant" gal I dealt with for 5 years was WAY over her head. She should have refused my business. She was only capable of filling our simple personal income tax stuff. Not setting up S corps and telling me to put cash on hand in CD's and money markets. My accountant actually helped me MAKE $XX,XXX extra per year.

Great topic as I am in the process of winding things down myself. Will likely keep it going on a part time basis but at 69 YO I'm done with the major resto's

Accountant # 3 & just pay the taxes for the building buy/sell? Back taxes on the "supposed transport business" could be a real problem! I'd be suing that retired accountant, what exactly were you paying him for?

I 'm guessing that if that was all it cost you for the false tax documents your last accountant filed in your name, you are pretty lucky! Unfortunately, I foresee an audit in your future, hope you still have all those old records!

Good luck in retirement Mike. Is selling your business an option ? I finished building a house for my son last summer. Kitchen cabinets and countertops were a pain. I wish that there were more cabinet contractors in the area. At least you should have more time for the duster when the dust settles on your retirement.

I tried selling the whole shebang even the box van for $40 grand, even the contacts. I hand them the key and walk away. 3 guys said they couldn’t afford it. I wanted to move it all to my house shop but it’s becoming a major deal by myself and the will is almost gone. I’ve become accustomed to being able to make stuff for the house if needed so I’d like some equipment at home but what do I take (I want it all lol) I’ve filled two 40 yard dumpsters so far with junk and can’t see the end yet, 55 years of junk (I’ll use it one day stuff) most of the machines is above the happy homeowner wants so no takers. I put the materials on FB, not a peep. So here I sit trying to get up to throw more away. A match is tempting.

Tough situation. Have you thought about bringing in an auction company that has experience with what you have ?

Yes a little

Advertise as a yard sale?

Sorry to hear about your business closing down, dude. It's never easy to let go of something you've worked on for so long. As for your tax papers, it's generally recommended to keep them for at least seven years. That should cover you in case of any audits or legal stuff. Yeah, I know it's a pain to deal with paperwork, but it's better to be safe, ya know?
Selling the materials and machinery sounds like a solid plan. You could check out scrap yards in your area to see if they're interested. It might be a hassle, but hey, every little bit helps, right? If you're looking to promote the sale, you could consider using a guest posting service. They can help you get the word out and reach a wider audience.

Did you try and list the equipment here?

This. I have a cpa in the family and they really do specialize in certain things. Some only do simple stuff that you could do without a cpa, like 1040ez. Some do small businesses. Some do large. Spme do oil and gas. Some file things whatever way you want so you don’t owe anything(illegal when you get caught and we know of one that for sure does this).