What tax documents you need to keep (and for how long) and how you can store them safely.

tax record storage

Tax season is upon us, and many have already filed their returns. Once you’ve got a return off your shoulders, what do you do with all of your tax-related documents?

 

Whether you’ve filed a return as an individual or for your business, it’s important to know which documents to toss, and which to keep.

 

Then make sure you store the required tax records safely. There’s no greater nightmare than suddenly finding yourself subject to an audit or enquiry if your documents have been lost, accidentally tossed or damaged.

 

That doesn’t mean you have to remind yourself of the tax office every time you open your cupboard!

 

With SpaceBox, you can store your tax records offsite, secure in the knowledge that they’re in properly sealed containers on secure premises – where they’re safe from damage due to damp, pests, burglaries or fire. And when you need your documents back, we’ll return them to your doorstep.

 

Which documents to keep

The Tax Administration Act (TAA), which came into effect on the 1 October 2012, requires all South African tax payers to keep specific documentation. The TAA also specifies that these records should be kept in their original form, in an organised manner and in a secure place.

 

If you don’t comply with these regulations and you’re audited by SARS, you could be prosecuted.

 

You’re required to keep most tax records and supporting documents for five years. Some documents should be kept for longer, or indefinitely.

 

Use the following lists as a guide when deciding which records to keep and which to throw away.

 

Documents that must be kept indefinitely include:

  • memorandum of incorporation, certificate of incorporation
  • certificate of name change (if applicable)
  • major agreements such as shareholders agreements and property purchase agreements
  • intellectual property documents
  • property documents, such as deeds and leases
  • minute books
  • company register
  • share certificates
  • record of trust monies.

Documents to be kept for 15 years include:

  • books of account
  • fixed asset register
  • annual financial statements.

You should keep paid cheques, bills of exchange and stock sheets for six years.

 

Documents you should keep for five years, unless stated otherwise:

  • your IRP5/IT3(a) certificate(s)
  • staff personnel records and salary and wages register (you’re required to keep these for at least three years)
  • certificates that you have received in respect of investment income
  • details of business travel
  • information relating to capital gains transactions
  • VAT records
  • records of stock purchase dates and prices
  • records of mutual funds
  • financial statements – including bank statements, invoices, proof of payment and receipts for all purchases
  • any other documentation relating to income you’ve received or deductions you’ve claimed
  • records of home purchase and home improvement costs
  • information relating to retirement annuity contributions
  • details of medical expenses paid.

How to store your tax documents

To protect yourself or your company, store all your tax-related documents in a dry, secure place. Ideally, use clean, sealable plastic containers to protect the documents from damp, mould, insects, sun exposure and other forms of damage.

 

Also make sure you organise your documents properly so you don’t end up filing any papers under the wrong tax periods. 

 

XtraSpace file storage is a hassle-free solution for organising your tax documents and keeping them safe. 

 

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