How long must I keep tax records as a self-employed person?

The IRS has specific rules on how long you must retain tax records. The key principle: keep records as long as the IRS has time to audit your return — this period is called the Statute of Limitations. **Standard retention periods:** - **3 years** from the filing date (or due date, whichever is later): Keep all records supporting your Schedule C income and deductions — receipts, bank statements, mileage logs, 1099s - **6 years**: If you underreported income by more than 25% of gross income, the IRS has 6 years to audit - **7 years**: For bad debt deductions or worthless securities claims - **Indefinitely**: If you filed a fraudulent return or didn't file at all — no statute of limitations applies - **Assets (equipment, vehicles):** Keep records until the asset is sold PLUS 3 more years (needed for depreciation and gain/loss calculations) **What to keep:** - All receipts for business expenses - Bank and payment processor statements - Mileage logs - Contracts and invoices from clients - W-9 forms from contractors you hired - Copies of all 1099s (NEC, K, INT, DIV) - Filed tax returns and all supporting forms - Payroll records (if you have employees): 4 years

• Standard: keep records 3 years from filing date
• 6 years if you underreported income by 25%+ of gross
• Assets (equipment): keep records until sold + 3 more years
• Always keep copies of filed tax returns indefinitely
• Digital records (scanned PDFs) are acceptable to the IRS