How long should you keep business records?
Keep most business tax records for at least three years from the date you filed. Keep them six years if you underreported income by more than 25%, four years for employment tax records, and seven if you claimed a loss from bad debt or worthless securities. Keep records for assets until the period closes after you sell.
Updated November 2026 · By Pankil Kumar, Managing Partner
Quick facts
- Most records. Three years from the date you filed
- Payroll. At least four years for employment tax records
- Asset records. Until the period closes for the year you sell the asset
What does the IRS actually require?
The period is tied to how long the IRS can assess more tax on a return, which is usually three years. That's why the common answer is three years, and also why it's not always right.
| Situation | Keep records for |
|---|---|
| Normal return | 3 years |
| Employment tax records | At least 4 years |
| You claimed a loss from worthless securities or bad debt | 7 years |
| You underreported income by more than 25% | 6 years |
| You filed a fraudulent return or no return | No limit |
The clock usually starts on the date you filed, or the due date if you filed early.
What should you keep?
- Bank and card statements
- Receipts and invoices for expenses
- Payroll records, W-2s, 1099s and quarterly returns
- Sales records, deposit details and processor reports
- Loan documents and lease agreements
- Asset records showing purchase price, date and depreciation
- Filed tax returns
Your books should show what the money was for, not just that it moved. A card statement alone may not prove an expense, especially for meals, travel and vehicles.
What should you keep longer than the IRS says?
Keep your formation documents, operating agreement, EIN letter, S-Corp election, and filed returns for as long as the business runs. Insurers, lenders and buyers can ask for records well beyond the IRS window, so check their terms before you shred anything. Your state may also have its own rules.
Can you keep everything digitally?
Yes, if the scans are clear, complete and easy to retrieve. Photograph receipts when you get them because thermal paper fades. Store files somewhere backed up, and name them so you can find them later. A simple folder for each tax year works well.
Sources
General information, not tax advice for your situation.
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See our bookkeeping serviceHow far back can the IRS audit a small business?
Usually three years from the filing date. It can reach six years if a substantial amount of income was left out, and there's no limit if no return was filed or a return was fraudulent.
Should I keep old tax returns forever?
It's a good idea. They help with amended returns, lenders and future preparers, and they take almost no space in digital form.
Do I need to keep paper receipts if I have a scan?
Generally a clear, complete digital copy works, as long as you can retrieve and read it if asked.
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