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The 7-Year Rule for Bad Debt

While the general rule for record retention is 3 years, specific tax claims trigger much longer requirements. The either/or dilemma is often between relying on the general rule (easier) and complying with the specific, longer requirements (necessary).

The retention rules are clear: Keep records for 7 years if you file a claim for a loss from worthless securities or a bad debt deduction. This Sound detail is a non-negotiable part of your record retention plan. Furthermore, keep all employment tax records for at least 4 years after the date the tax is due or is paid, whichever is later.

Ready to build your bulletproof business recordkeeping system? Read more on this topic by visiting https://www.safesimplesound.com/build-your-business-recordkeeping-system/.

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DISCLAIMER: This content is for educational purposes only and should not be considered personalized financial advice. Always consult with a qualified financial professional before making financial decisions.

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