What Records You Need to Keep (and For How Long)

Kim Bernstein
Apr 7
2 min read

Running a business means juggling a lot of paperwork—receipts, tax forms, invoices, payroll records... the list goes on. But which records do you actually need to keep, and for how long?

Here’s a clear breakdown so you can stay organized, protect your business, and be ready if the IRS (or your accountant) ever comes calling. 🗂️✅

Why Recordkeeping Matters

Good recordkeeping helps you:

✅ Stay compliant with tax laws

✅ Maximize deductions with proper documentation

✅ Make smart financial decisions based on real data

✅ Be prepared in case of an audit

General Rule of Thumb

The IRS recommends keeping most tax-related records for at least 3 years, but certain documents should be kept longer depending on the situation.

Let’s break it down:

1. Tax Returns & Supporting Documents

Keep for: At least 3 years from the date you filed or 2 years from the date you paid the tax—whichever is later.
Keep longer if: You omitted more than 25% of your gross income (6 years), filed a fraudulent return (indefinitely), or didn’t file at all (indefinitely).

2. Receipts & Expense Records

Keep for: 3–7 years depending on what they support (deductions, depreciation, etc.)
Includes: Meals, mileage logs, equipment purchases, subscriptions, and anything you plan to deduct.

3. Payroll Records

Keep for: At least 4 years after the date the taxes were due or paid.
Includes: Employee information, timesheets, pay stubs, W-2s, 1099s, and tax filings (Forms 941, 940).

4. Bank & Credit Card Statements

Keep for: 3–7 years, depending on their use in tax filings or audits.
Helpful for verifying income and expenses if receipts are missing.

5. Business Formation & Legal Documents

Keep for: Permanently
Includes: Articles of incorporation, partnership agreements, EIN confirmation, licenses, and permits.

6. Asset Records (Depreciation, Purchases, Sales)

Keep for: At least 7 years after you dispose of the asset.
Includes: Invoices, loan documents, and depreciation schedules.

7. Insurance Policies & Loan Documents

Keep for: As long as the policy/loan is active + a few years after.

How to Store Business Records

✅ Digitally is best—scan and organize files by year and category.

✅ Use cloud storage tools like Google Drive, Dropbox, or a secure bookkeeping platform.

✅ Back up your files regularly.

Final Thoughts

You don’t need to hang on to every piece of paper forever—but knowing what to keep and for how long can save you major stress during tax time or an audit.

Need help organizing your financial records or moving your books to the cloud? KB2 Bookkeeping & Tax is here to help! Let’s keep your business clean, compliant, and clutter-free. 🧾🚀