How Long Should You Keep Tax Records? IRS Rules by Situation

Keep tax records for at least 3 years after you file the return they support, because that is how long the IRS generally has to assess more tax and how long you have to claim a refund. Some records need longer: employment tax records at least 4 years, 6 years if you left out more than 25% of your gross income, 7 years for a worthless-securities or bad-debt claim, and indefinitely if you never filed or filed a fraudulent return.

The clock is tied to the return, not the calendar year of the receipt, and records about property follow a different rule altogether. Here is how each period works, how to count it, and what a practical retention schedule looks like for a small business.

The rule behind every number: the period of limitations

The IRS ties record keeping to the period of limitations, which is the window in which you can amend a return to claim a credit or refund, or the IRS can assess additional tax. You must keep the records that support an item of income, deduction or credit on a return until that window closes for the return.

Two counting rules matter:

• The years run from the date you filed, unless stated otherwise.
• A return filed before the due date is treated as filed on the due date. Filing your 2025 return in February 2026 does not start the clock early; it starts on April 15, 2026.

IRS record retention periods, situation by situation

• 3 years: the default, when none of the longer situations below apply.
• 3 years from filing or 2 years from paying the tax, whichever is later: if you file a claim for credit or refund after you file your return.
• 4 years: employment tax records, counted from the date the tax becomes due or is paid, whichever is later.
• 6 years: if you do not report income you should have, and it is more than 25% of the gross income shown on the return.
• 7 years: if you file a claim for a loss from worthless securities or a bad debt deduction.
• Indefinitely: if you do not file a return, or file a fraudulent one.

Property records: keep them until you sell, then some

Records for property, such as equipment, vehicles, buildings and investments, are kept until the period of limitations expires for the year you dispose of the property. You need them to figure depreciation while you own the asset and your gain or loss when you sell it.

If you got the property in a nontaxable exchange, your basis carries over from the property you gave up. That means you keep the records for the old property as well as the new one, until the limitations period runs out for the year you dispose of the new property.

Payroll records follow more than one rulebook

If you have employees, the IRS minimum is 4 years for employment tax records. Federal labor law adds its own requirements, and the longer one wins:

• Payroll records under the Fair Labor Standards Act: at least 3 years, per the Department of Labor.
• Time cards, wage rate tables and work schedules that wage calculations are based on: 2 years under the FLSA. Because these also support your employment tax figures, many employers keep them for the IRS's 4 years.
• Form I-9: for a former employee, 3 years after the date of hire or 1 year after employment ends, whichever is later, per USCIS.

State payroll and unemployment agencies may require longer, so check your state's rules.

Worked example: a retention schedule for a Portland, Maine bakery

Harbor Lane Bakery is a sole proprietorship in Portland, Maine, with four employees. The owner files her 2025 Form 1040 with Schedule C on March 2, 2026.

1. Receipts, bank statements and invoices for 2025: the return is treated as filed on its April 15, 2026 due date, so the 3-year window ends April 15, 2029. She keeps these until at least then.
2. If she pays more tax later: suppose an IRS notice leads her to pay extra 2025 tax in June 2027, and she then files a refund claim on a related item. The claim window is the later of 3 years from filing (April 15, 2029) or 2 years from payment (June 2029), so the supporting records stay until at least June 2029.
3. Payroll for the fourth quarter of 2025: the taxes were paid in January 2026. Four years from the later of the due date or payment date takes her to early 2030 for those records.
4. The deck oven bought in 2019: she has depreciated it every year. If she sells it in 2027 and reports the sale on her 2027 return, filed by April 15, 2028, she keeps the purchase invoice and depreciation records until at least April 15, 2031.
5. Former employee's Form I-9: hired March 2021, left June 2026. Three years after hire is March 2024; one year after leaving is June 2027. The later date wins, so she keeps it until June 2027.

The schedule is not one number per drawer. It is one rule per type of record, and the longest applicable rule decides.

Paper, scans and electronic records

The IRS accepts electronic records, but they must meet the same standards as paper. An electronic storage system must be able to index, store, preserve, retrieve and reproduce records in legible form, and give a complete and accurate record the IRS can access. Once you have tested that your scans reproduce the originals properly, the original paper can generally be destroyed. The detailed requirements are in Revenue Procedure 97-22.

Practical tips:

• Scan receipts promptly; thermal paper fades long before 3 years are up.
• Store files by tax year and by type, so you can delete a year's routine receipts without touching asset files.
• Keep a backup copy somewhere other than the laptop you work on.

Before you shred: non-tax reasons to keep records longer

The IRS reminds taxpayers that insurance companies and creditors may require records for longer than the tax rules do. Lenders often ask for several years of returns, and a buyer of your business will expect to see historical books. Also keep, more or less permanently, copies of filed returns themselves, formation documents, and records showing the basis of your home and long-held investments.

Common record-keeping mistakes

• Counting from the end of the tax year instead of from the filing date or due date.
• Discarding asset records after 3 years while still depreciating the asset.
• Keeping receipts but not bank statements, or the reverse; an examiner usually wants both.
• Assuming you are safe at 3 years when an income item was missed; the 25% rule extends the window to 6.

hellobooks< / a > -keeps-your-records-findable">How HelloBooks keeps your records findable

A retention schedule only helps if you can find the record when it is needed. In HelloBooks, you can attach the receipt or invoice to the transaction it supports; AI document extraction reads the vendor, amount, tax and line items from a PDF or photo and matches it to the bank line, so the evidence sits with the entry. Bank feeds and reconciliation tie each month to the bank statement, the fixed assets register keeps purchase cost and depreciation history for as long as you own an asset, and the audit trail shows any change made after the fact. Period locking stops a closed year from being edited, and CSV export lets you archive a full year's ledger outside the software. If you run payroll in HelloTime (TimeX), its payroll journals sync into HelloBooks, so employment tax figures in the books match the payroll system.

This is general information on US record retention as of November 2026, not tax or legal advice; check the IRS guidance on how long to keep records, your state's rules, or a CPA for your business.