Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.Keep records indefinitely if you file a fraudulent return.Keep records indefinitely if you do not file a return.Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.The IRS record keeping schedule is as follows: If you use an expense management system to store your records, be sure that you will have unhindered access to them for the 7 years and that they have a backup of all of your records.Īlso make sure that your records are properly secured from theft, accidents, and human error, whether in hard or electronic copy. If you keep your records electronically, be sure to have a duplicate copy in a separate place, whether in hard copy or a separate, secure electronic location. However, it is best practice to keep your records for 7 years in case there is an issue of which you are unaware. The IRS only requires you keep your records for 3 years if you’ve been correctly filing your taxes. Ideally, you would look for an accountant or accounting firm that has experience working with your type of business or industry. Consult with an accountant on the front-end to determine how your expense records should be documented and archived. Be proactive - do not wait until the IRS comes calling to find out how you should be keeping records. A collection of properly kept records will be one of your biggest allies in the event of an audit.
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