How long to keep tax and business records
Keep tax returns and their supporting records for at least three years after you file, because that's how long the IRS usually has to audit. Keep them six years if you might have left out more than 25% of income, and seven for bad debt or worthless securities. Keep payroll records four years, and formation papers permanently.
Updated November 2026 · By Pankil Kumar, Managing Partner
Quick facts
- Most records. Three years from the date you filed
- Payroll records. Four years after the tax is due or paid
- Keep forever. Formation papers, returns and ownership records
How long should I keep tax records?
The IRS ties record keeping to how long it can assess more tax, called the period of limitations.
| Situation | Keep records for |
|---|---|
| Normal case | 3 years from the date you filed, or the due date if later |
| You claim a loss from worthless securities or bad debt | 7 years |
| You left out income of more than 25% of what you reported | 6 years |
| You didn't file a return | Indefinitely |
| You filed a fraudulent return | Indefinitely |
| Employment tax records | At least 4 years after the tax is due or paid |
| Property records (buildings, equipment, investments) | Until 3 years after the year you sell or dispose of it |
What should a business keep, and for how long?
| Record | Suggested retention |
|---|---|
| Tax returns | Permanently, to prove what you filed |
| Bank and credit card statements | 7 years |
| Receipts and invoices backing deductions | 7 years |
| Payroll records, W-2s, W-4s and 941s | 4 years at least, 7 is safer |
| 1099s sent and received | 4 years |
| Fixed asset and depreciation records | Life of the asset plus 3 years |
| Formation papers, operating agreement, EIN letter | Permanently |
| Contracts and leases | Life of the contract plus 7 years |
Seven years for financial records covers the six-year rule with a margin. Lenders, buyers and state tax agencies may also ask for older records, and some states keep returns open longer than the IRS.
Can I keep records digitally?
Yes. Scans and photos are accepted if they're complete, readable and you can produce them on request. Keep backups in a second place. Your accounting software holds much of this already, which is one reason to keep your books monthly. Our year-end bookkeeping checklist covers what to file away each year.
Sources
General information, not tax advice for your situation.
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See our bookkeeping serviceHow many years should I keep tax returns?
At least three years after filing, and longer in some cases. Many owners keep the returns themselves permanently and the backup for seven years.
How long do I keep payroll records?
At least four years after the tax is due or paid. Many employers keep them seven years.
Can I throw away receipts after seven years?
Usually, yes, unless they support property you still own or a return that's still open.
Are digital copies enough for the IRS?
Yes, if they're complete and legible and you can produce them when asked.
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