If you’re a business owner, the IRS requires you to maintain records of employees, wages, and more. These records must be kept for a minimum of four years. Intentional failure to keep the necessary employment records is a misdemeanor and could result in a fine of up to $100,000 (for corporations) and imprisonment for up to one year! That’s why it’s so important for even small businesses to keep adequate employment records.
Here’s what you need to keep to comply with IRS regulations:
- EIN (employer identification number)
- Dates and amounts of all pension, annuity, and wage payments
- Name, address, SSN, and occupation of all employees (and other recipients)
- Dates of employment
- Any employee W-2 copies that were returned as “undeliverable”
- Copies of employee W-4s
- Amounts of reported tips
- Tip allocation documentation
- FMV of in-kind wages paid
- Time frames during which any employees were paid while off the job for sickness or injury, as well as amount (and weekly rate of payments) made by the employer or third-party payer (such as an insurance company)
- Tax deposit dates and amounts
- Company tax returns
- Documentation, including substantiation, of fringe benefits
By maintaining these employment records, you’ll comply with IRS requirements and avoid violations of employment law. If you have questions or concerns about the tax information you need to keep in your company records, Price Advantage Accounting can help. Just call now to get started!