Financial Records – What to Keep and How Long
Key Takeaways
- You must keep records to support income and deductions reported on your IRS tax return for as long as they are necessary.
- Some records like tax returns, profit statements, and corporate reports should be kept forever, according to the provided table.
- The time to keep records depends on your return; a fraudulent return means you must keep records indefinitely.
“If it wasn’t for the “paperwork” running a child care business would be more fun.” Unfortunately, the IRS says you must keep records as longs as it may be necessary to support the income and deductions you reported on your business and personal tax return. And, of coursed, the length of time you have to keep this financial information also depends on how “honest” you were on you tax returns. If you file a fraudulent return, you must keep records indefinitely.
The following table represents the standard time you should keep certain records. You will also want to consult with your CPA and other advisors to decide exactly how long is long enough.
| Type Record | Time Period |
| Accounts Payable and Receivable Records | 3 to 5 years |
| Profit and Loss Statement and Balance Sheet | Forever |
| Bank Statements | 3 to 5 years |
| Corporate Reports – Contracts, Annual Reports | Forever |
| Constitutions, Bylaws, Incorporation Records | Forever |
| Personnel Records- Health, Safety, Injury Claims | Forever |
| Applications, Employee Files, Payroll Records | 5 to 7 |
| Building Records – Deeds, Leases, Contracts | Forever |
| Building Maintenance, Repair, | 5 to 10 years |
| Sales Tax Returns | Forever |
| Tax Returns | Forever |
