How long should a small business keep records?

How many years do I have to keep business records for the IRS?

Generally 3 years from the date you filed the return the record supports. The IRS sets longer periods for some cases: at least 4 years for employment tax records, 6 years if you left out income of more than 25% of the gross income on your return, 7 years if you claim a bad debt or worthless securities loss, and indefinitely if you don't file. Records for property such as a vehicle or equipment are kept until the period of limitations expires for the year you dispose of the property (IRS: How long should I keep records?).

Last verified November 2, 2026 against IRS: How long should I keep records?, IRS: What kind of records should I keep. Fee change tracker · How we verify

The IRS periods in one table

Situation	Keep the records
Normal case: income, expenses and credits on a return you filed	3 years
You file a claim for credit or refund after filing	3 years from filing or 2 years from paying the tax, whichever is later
Employment tax records (if you have employees)	at least 4 years after the tax is due or paid, whichever is later
You left out income that is more than 25% of the gross income on the return	6 years
You claim a loss from worthless securities or a bad debt deduction	7 years
Car, equipment, computers and other property used in the business	until the period of limitations expires for the year you dispose of the property
You don't file a return, or file a fraudulent one	indefinitely

Source: IRS, How long should I keep records? The years count from the date the return was filed; early returns count as filed on the due date. These are the federal income tax periods. Your state, insurer or lender can require longer.

Why 3 years? The period of limitations

The IRS ties record-keeping to the period of limitations: the time in which you can amend a return to claim a refund, or the IRS can assess more tax. Records that support an item of income, deduction or credit on a return should be kept until that period runs out. That is why the answer depends on what the record supports, not on what kind of paper it is.

Worked example

Say you file your 2025 return on March 10, 2026, before the April 15, 2026 due date. The IRS treats it as filed on the due date, so the normal 3-year period runs to April 15, 2029. Receipts, invoices, bank statements and your mileage log for 2025 should be kept until then. A delivery van you bought in 2025 and sell in 2030 is different: keep its purchase and depreciation records until the period runs out for your 2030 return: April 15, 2034 if you file that return on time in 2031.

Illustration only. Dates assume a calendar-year filer with no extension and none of the longer-period situations.

What to keep

The IRS says you can use any recordkeeping system that clearly shows your income and expenses, and that for most small businesses the business checking account is the main source for entries in the books (IRS: What kind of records should I keep). It lists these supporting documents:

Everyday paperwork: sales slips, paid bills, invoices, receipts, deposit slips, canceled checks.
Purchases and expenses: each document should show the payee, amount, proof of payment, date, description of the item or service.
Gross receipts: deposit records, receipt books, invoices, cash register tapes and Forms 1099-MISC. If you sell on Etsy or take card payments, keep your monthly statements and any Form 1099-K too.
Assets (vehicles, equipment, computers): when and how you got it, price, improvements, depreciation, how used, when and how disposed of, selling price.
Car use: a mileage log with date, destination, business purpose and miles for each trip. See what a mileage log needs for the IRS.
Copies of your filed tax returns. The IRS suggests keeping them because they help with future returns and amended returns.

Can records be digital?

Yes. The IRS says the same rules apply to electronic records: “All requirements that apply to hard copy books and records also apply to electronic records.” A scanned receipt or a spreadsheet works if it shows the same details and you can produce it when asked. Back up digital files somewhere other than the computer they live on.

A simple routine

Keep one folder (paper or digital) per tax year, split into income, expenses, vehicle and assets.
Each month, download bank, card and platform statements and match them to your spreadsheet.
After you file, add a copy of the return to that year's folder and write the keep-until date on it (normally 3 years after the due date).
Move asset and vehicle records into a separate “keep until sold” folder that doesn't get purged with the yearly ones.
Once a year, check the keep-until dates before shredding anything.

Questions

How long do I need to keep business receipts?

Generally 3 years from the date you filed the return they support, according to the IRS. Keep them longer in the cases the IRS lists: at least 4 years for employment tax records, 6 years if more than 25% of gross income went unreported, 7 years for a bad debt or worthless securities loss.

Is it 3 years or 7 years?

Both appear on the IRS page. 3 years is the general rule. 7 years applies if you file a claim for a loss from worthless securities or a bad debt deduction. Many people keep 7 years to be safe, which is a choice, not the general IRS requirement.

When does the 3 years start?

From the date you filed the return. The IRS says early returns count as filed on the due date, so filing early doesn't start the clock sooner. If you file a refund claim later, the period is 3 years from filing or 2 years from paying the tax, whichever is later.

How long do I keep records for a car or equipment?

The IRS says to keep property records until the period of limitations expires for the year you dispose of the property. You need them to figure depreciation and the gain or loss when you sell.

Can I keep business records digitally?

Yes. The IRS says the same rules apply to electronic records. Scans and spreadsheets are fine if they show the required details and you can produce them.

Should I keep records longer than the IRS requires?

The IRS itself says to check whether you need records for non-tax purposes before discarding them, for example because your insurance company or creditors require you to keep them longer.

General information, not tax, legal or accounting advice. Rates change: check the linked official source before you rely on a number. Not yet reviewed by a CPA or EA.