Record keeping recommended by the IRS
A little organization during the year makes tax time faster, cheaper and far less stressful.
Putting your tax documents in order throughout the year makes it much easier to prepare your return when filing season arrives. Here is what the IRS wants individuals and small business owners to know.
What to keep: individuals
In most cases, keep the records that support items on your tax return for at least three years after you file. These include:
- Bills, receipts and invoices
- Credit card statements and mileage logs
- Canceled, imaged or substitute checks, and other proof of payment
- Any other records that support the deductions or credits you claim
Keep records related to property for at least three years after you sell or otherwise dispose of it. Examples include a home purchase or improvements, stocks and other investments, IRA transactions, and rental property records.
What to keep: small business owners
Keep all employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Also keep records documenting gross receipts, purchases, expenses and assets, such as:
- Cash register tapes and point-of-sale reports
- Bank deposit slips and account statements
- Receipt books, and purchase and sales invoices
- Credit card charges and sales slips
- Forms 1099
- Canceled checks and petty cash slips
- Real estate closing statements
Electronic records count too: accounting software files, databases, saved files and emails.
How to keep them
The IRS generally doesn't require any particular system, but a designated place for tax documents and receipts is a good idea, whether that's a folder, a box or a scanned-document app. It makes your return easier to prepare and may remind you of transactions you'd otherwise miss. Good records also help if you receive an IRS notice or need to back up items on your return during an audit.
Official guidance
For the full IRS rules, see How long should I keep records? and Publication 583, Starting a Business and Keeping Records.
General information only. Some situations, such as unreported income or a worthless securities loss, call for keeping records longer. Ask us about yours.