Recordkeeping—what do I need to keep and for how long?
How long do you need to keep records?
You want to make sure that you keep your tax return & any supporting documents for as long as they may be needed by the IRS so if there is a question, you can show proof of your income/expenses that were claimed on the tax return. Usually, that is 3 years after the date that you filed your tax return: however, if you should get audited and the IRS finds problems or discrepancies, they could go back up to 7 years. Additionally, business owners should keep all payroll records for at least 4 years after the date any of the payroll taxes were due or paid.
What do you need to keep?
You want to keep a copy of your tax return. If you don’t have a copy, you can obtain one from the IRS by filling out Form 4506. You may obtain a transcript of your return on the IRS website (
WWW.irs.gov), but it won’t include any attachments that were previously filed.
You want to keep any documents that prove the income & expenses or deductions that were filed on your tax return.
For individual returns, you want to keep any W-2s, 1099s, 1098s, K-1s, stock transaction statements, HSA statements, & any other statements that employers, financial institutions, or other businesses may have issued to you to show taxable income & losses. You also want to keep any receipts or documentation for property taxes, medical expenses, unreimbursed employee expenses, charitable donations, education expenses, and home improvement expenses—anything that you purchased that could be either deducted as an itemized deduction or that would qualify for a tax credit.
For business owners—whether you are a sole proprietor or a corporation, you want to keep all bank & credit card statements, any invoices or register receipts showing income that was earned, payroll records, bills & receipts for all business purchases, and any documents showing the purchase/lease of buildings, vehicles, furniture & equipment reported on the tax return. You also want to keep all mileage records for any vehicles to show business use.
Basically, you need to keep any supporting documents that were used to compile your tax return. The list of items to keep with your tax return listed above is not exclusive. Every tax return is different and may require additional documents to keep. If you have any questions on what you should be keeping for your records, please feel free to give us a call.
Checkpoint* & IRS Pub 538