Answers · Bookkeeping
What Records Should a Small Business Keep?
Keep records sufficient to prove income, deductions, credits, asset basis, payroll and filed-return amounts for as long as they can affect a tax period.
How it works
The rule, and what it turns on.
There is no universal three-year rule for every document. Employment-tax records generally require at least four years; asset records should be retained while the asset remains relevant plus the applicable period after disposition.
Example
Retain bank/card statements, invoices, payroll, loans, asset invoices, sales records, returns and supporting schedules.
Common mistakes
What we see go wrong, and what we do instead.
- Discarding asset records after three years while asset is still owned.
- Keeping only bank statements.
A better approach
- Use secure digital storage by client/year/account.
Authority
Where this comes from, so you can check it.
IRC §6001; Treas. Reg. §1.6001-1; IRS Publication 583; IRS Small Business Recordkeeping guidance.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
Also asked
The same question, the other ways people put it.
- How Long Should Businesses Keep Tax and Accounting Records?
- How to Get Your Books Ready for Tax Preparation
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