Keeping everything forever is expensive and messy. Throwing things out too soon can hurt you in an audit. Here is a practical guide based on IRS guidance and common practice.
The general rule
The IRS generally has three years from the date you file to audit a return. That window stretches to six years if income is substantially underreported, and there is no limit if a return was never filed or was fraudulent. That's why many advisors suggest keeping supporting records for at least seven years.
A simple retention schedule
| Record | Suggested retention |
|---|---|
| Tax returns | Permanently |
| Receipts, invoices and records supporting a return | 7 years |
| Bank and credit card statements | 7 years |
| Payroll records and payroll tax filings | At least 4 years (IRS minimum); many keep 7 |
| Employee files | Varies; check federal and state rules |
| Records for property and equipment | As long as you own it, plus 7 years after you sell or dispose of it |
| Year-end financial statements | Permanently |
| Formation documents, bylaws, operating agreements, minutes | Permanently |
| Contracts and leases | Life of the agreement plus 7 years |
| Insurance policies | Permanently, or as advised by your agent |
This is a general guide. Your industry, state, lender or insurance carrier may require longer, and an attorney can advise on legal holds and employment records.
Paper or digital?
The IRS accepts electronic records as long as they are complete, legible and retrievable. Scanning receipts into your accounting system or a secure cloud folder is usually safer than a shoebox.
Destroying old records safely
Shred paper records and securely delete digital files. Anything with Social Security numbers, bank details or employee information needs extra care.
Want help setting up a simple digital filing system? That's part of our bookkeeping service.
This article is general information, current as of September 2026, and is not tax, legal or financial advice for your situation. Tax rules change often. Talk with us before acting on anything here.