A well-organized system for your records will make it easier to
prepare your tax return and will also help you answer questions if
your return is selected for examination or if you are billed for
Records such as receipts, canceled checks, and other documents that
support an item of income or a deduction appearing on your return
should be kept until the statute of limitations expires for that
return. Usually this is three years from the date the return was due
or filed, or two years from the date the tax was paid, whichever is
later. There is no statute of limitations when a return is false or
fraudulent or when no return is filed.
You should keep some records indefinitely, such as property records,
since you may need them to prove the amount of gain or loss if the
property is sold. Generally, income tax returns should be kept for a
They will help you prepare future tax returns and amended returns.
For more information on recordkeeping requirements for individuals,
order Publication 552, Recordkeeping for Individuals.
If you are an employer, you must keep all your employment tax records
for at least four years after the tax is due or paid, whichever is
If you are in business, there is no particular method of bookkeeping
you must use. However, you must use a method of bookkeeping that
clearly reflects your income and expenses.
People in business often have expenses for travel, entertainment,
gifts, and cars. The documentation you should keep for each of these
expenses can be found in Publication 583, Starting a Business and
Keeping Records; Publication 463, Travel, Entertainment, Gift, and
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