Apr 14, 2010

How Long Should You Keep Records?

You should keep your business and tax records for as long as the IRS has to audit you after you file your returns for the year. These statutes of limitation range from three years to forever. To be on the safe side, keep your tax returns indefinitely. They don't take up much space, so this is not a big hardship. Your supporting documents probably take up more space. You should keep these for at least six years after you file your return. Keeping your records this long ensures that you'll have them available if the IRS decides to audit you.You might also need them for other purposes--for example, to get a loan, mortgage, or insurance. Keep your long-term asset records for three years after the depreciable life of the asset ends. For example, keep records for five-year property (such as computers) for eight years. You should keep your ledger sheets for as long as you're in business because a potential buyer of your business might want to see them. For more information, Deduct It! Lower Your Small Business Taxes, by Stephen Fishman.