📁 Recordkeeping 101: What to Keep, How Long, and How to Avoid the Dreaded Paper Chase

Accurate and timely financial records are essential—not just for tax season but for audits, legal protection, loan applications, and keeping your business running smoothly.

And yes… the IRS expects you to keep them.
(They didn’t get the memo about your “organized chaos” filing system.)

⏳ How Long Should You Keep Records?

A quick rule of thumb:
Most tax documents = 3 years
But some items need to stick around longer.

🗂️ General Retention Guide

📘 Past tax returns: 3 years
🧾 Receipts: 3 years
📚 Misc. financial records: 3 years
🧑‍💼 Employment tax records: 4 years
⚠️ If income was omitted: 6 years
💸 Bad debt or worthless securities claims: 7 years

When in doubt? Keep it. Your future self will thank you.

📑 Records You Should Always Keep

These documents support the numbers on your tax return:

• 🧾 Receipts

• 🏦 Bank statements

• 🧮 Invoices

• 💼 Payroll records

• 🛒 Cash register tapes

• 💳 Credit card receipts/statements

• 🏧 Deposit records

• ✔️ Proof of payment (checks or EFT)

• 💸 Petty cash slips

• 📥 Accounts receivable

• 📤 Accounts payable

• 📝 Tax filings

• 📂 W-2s and 1099s

• 📄 Previous tax returns

If it proves income, expenses, deductions, or credits, it’s worth saving.

🚌 What About Small Expenses?

For expenses under $75, or for travel, meals, and lodging, receipts may not be required.
You do still need:

• Who

• What

• When

• Where

• Why

✨ Pro tip: Keep a digital or handwritten expense log. The IRS actually approves this method.

📎 Important Non-Tax Records to Keep

Not all essential records are tax-related. Keep these too:

• 🖊️ Contracts

• 🏛️ Articles of incorporation/organization

• 🪪 Business licenses & permits

• 📘 Annual reports

• 🛡️ Safety, HR, and compliance documents

These documents protect your business long-term.

💻 The Best Way to Store Records

Electronic storage is the most efficient and secure method.

• ☁️ Cloud storage

• 🗃️ Digital filing cabinets

• 🔄 Automatic backups

• 🏷️ Folders labeled by year and category

No more faded receipts or mystery envelopes.

🔍 The Bottom Line

You must be able to prove every number on your tax return—income, expenses, deductions, and credits. Documentation is your safety net.

Your bookkeeper can guide you on what to keep and how to organize it. When you’re unsure, ask—they know where the money came from, where it is, and exactly where it went.

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