If your office is feeling overwhelmed with records, it may be time to clean out those old payroll files. But before you start, it’s important to understand which records you can destroy and which should be retained. Failing to retain proper records can lead to sizable penalties if you face the Internal Revenue Service or an employment-related lawsuit.
The American Payroll Association offers basic guidelines for payroll record retention. Let’s take a quick look at these guidelines as they relate to your medical office.
These records must be maintained for a period after the due date of your employee’s last personal income tax record.
You need to follow specific guidelines when keeping personal information on file, so it’s best to consult a payroll records expert to ensure compliance.
This includes information such as Social Security and Medicare taxes, as well as the amount withheld for each tax and date of withholding if that is different than the payment date.
These statements regarding salary and benefits must be on file and provided to your employees. You also may want to keep your employees’ dates of employment.
These records include adjustments or settlements of taxes as well as amounts and dates of tax deposits.
Other records are important as well, including documents regarding wage continuation after an accident or absence or copies of forms concerning federal income tax withholding from sick pay. These forms may not come up as often, so it is essential that you speak with a professional to learn more about when, where, and how to store them.
Additional paperwork includes such things as health insurance, educational assistance, adoption or dependent care assistant plans, and other benefits you provide your nurses, medical assistants, or administrative staff. These benefits may be excluded from income, but they could be used to determine whether your plan meets requirements for excluding the benefits from staff income.
This information can be complicated and confusing, and additional rules and exceptions may apply. If you want to concentrate on running your medical practice instead of on managing records, give us a call to help you navigate the payroll records process.
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