How long to keep business records: a retention schedule for employers
By Arthur Teboul, DokuTrak · Published
In brief
How long to keep business records depends on the rule behind each record. The IRS wants tax records until the return’s limitation period closes, payroll tax records for four years and asset records until the sale, and employers add wage-hour and Form I-9 periods.
The checklist: Employer record destroy-date schedule
Write a destroy date next to each line for every year you file. When two rules apply to one record, use the later date.
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Build your own list: Answer 10 yes-or-no questions and the tax document checklist generator combines the lists that apply into one checklist.
Books and tax returns
- Filed business returns: Schedule C, Form 1065, 1120-S or 1120Keep for good; they anchor every other record
- General ledger, journals and year-end trial balanceUntil the return they fed is out of its period
- Bank and credit card statementsEvery account the business used, all months
- Sales records: register tapes, deposit slips, invoices issuedShow amount and source of gross receipts
- Expense invoices, receipts and canceled checksEach one tied to a ledger entry
- Forms 1099-NEC you filed and the Forms W-9 behind themSame period as that year’s return; $600 line for 2025 payments, $2,000 for 2026
Payroll and employment tax
- Forms 941, 940 and state payroll returnsAt least 4 years after the tax is due or paid
- Copies of Forms W-2 and W-3Same 4-year minimum
- Each employee’s Form W-4Keep the latest and any it replaced in the period
- Payroll registers with employee dataAt least 3 years from last entry under wage-hour rules
- Time cards and wage rate tablesAt least 2 years under wage-hour rules
- Tax deposit confirmationsProof each deposit was made on time
Hiring and contracts
- Form I-9 for each employee3 years after hire or 1 year after leaving, the later; stored apart
- Blank Form I-9 stock checked for editionUse the 01/20/25 edition; discard any form expiring 07/31/2026
- Collective bargaining and pay agreementsAt least 3 years from last effective date
- Signed contracts with clients and suppliersLife of the contract plus the period of any return it affects
- Leases for premises and equipmentLife of the lease plus the tax period
Assets
- Purchase invoices and closing papers for equipment, vehicles, buildingsUntil the asset is sold, then the sale year’s period
- Depreciation schedules (Form 4562) for each yearSame period as the purchase records
- Improvement invoices for assets you still ownThey add to basis
- Sale, trade-in or disposal documentsKeep with the asset file; trades carry basis forward
Three rulebooks, one filing cabinet
A small business with staff answers to more than the IRS. Tax law sets how long you keep the books and the documents behind them. The Fair Labor Standards Act rules from the Labor Department set how long you keep pay and time records. Immigration rules set how long you keep each Form I-9.
The periods overlap but do not match. A payroll register can be a tax record and a wage-hour record at once, so it follows the longer of the two. The table sets the main periods side by side.
| Record | Minimum period | Rule |
|---|---|---|
| Books and supporting documents for an income tax return | 3 years from filing, longer in some cases (IRS, How long should I keep records?) | IRS |
| Employment tax records: Forms 941 and 940, Form W-2 copies, Forms W-4 | At least 4 years after the tax is due or paid, the later (IRS, How long should I keep records?) | IRS |
| Records for business assets | Through the limitation period of the return that reports the sale (IRS, How long should I keep records?) | IRS |
| Payroll records with the employee data the FLSA requires | At least 3 years from the last entry (29 CFR 516.5) | Labor Department (29 CFR 516.5) |
| Time cards and wage rate tables | At least 2 years (29 CFR 516.6) | Labor Department (29 CFR 516.6) |
| Form I-9 for each person hired | 3 years after hire or 1 year after employment ends, the later (USCIS M-274, Retaining Form I-9) | USCIS |
Books and the documents behind every entry
Supporting documents are the papers that prove the entries in your books, and the IRS asks you to keep them in an orderly way, for example by year and type of income or expense (IRS Publication 583). They are what an examiner asks for first.
For income, that means proof of the amount and the source. Gross receipts are the income you receive from the business, and Publication 583 lists cash register tapes, bank deposit slips and receipt books among the documents that show them (IRS Publication 583). For costs, it means the invoice and the proof of payment, such as a canceled check or a card statement.
Keep these for the life of the return they support, which is usually 3 years from filing (IRS, How long should I keep records?). Some years stay open longer. The tax records schedule by type covers the 6-year, 7-year and refund-claim cases in detail (IRS, How long should I keep records?).
Equipment, vehicles and buildings
Asset records last longest. Assets are the property, such as machinery and furniture, that you own and use in your business, and their files carry the cost that each year’s depreciation and the final sale are measured against (IRS Publication 583). A truck bought this year may be sold in eight years. Its purchase invoice has to survive that long, and then the period for the sale year.
Keep the purchase document, the date it was placed in service, the depreciation schedule each year, any improvement invoices, and the sale or disposal paper. If you traded one asset for another, keep the old asset’s records too, because the basis carries over (IRS, How long should I keep records?).
Payroll, time and hiring records
The Labor Department rules split payroll into two layers. Payroll records holding the required employee data, and written agreements such as collective bargaining agreements, must be kept at least 3 years (29 CFR 516.5). Time cards with daily start and stop times, and wage rate tables used to compute pay, must be kept at least 2 years (29 CFR 516.6).
Form I-9 has its own clock. You keep it 3 years after the date of hire or 1 year after employment ends, whichever is later (USCIS M-274, Retaining Form I-9). Store Forms I-9 apart from personnel files, so you can hand them over without opening other records.
Check the edition on the forms you file for new hires. USCIS lists 01/20/25 as the current edition; an 08/01/23 form is accepted only if its printed expiration date is 05/31/2027, and the one marked 07/31/2026 is no longer valid (USCIS, Form I-9). Old forms completed on a valid edition stay in the file for their full period.
Contractors leave a different trail. Keep each one’s Form W-9 with the Forms 1099 filed for the same tax year. The filing line for service payments was $600 for 2025 (2025 Instructions for Forms 1099-MISC and 1099-NEC) and is $2,000 for payments made in 2026 (Instructions for Forms 1099-MISC and 1099-NEC), so a W-9 on file does not always mean a 1099 was due.
Scanned records, and records after you close
You can go paperless. Every rule for paper books also applies to electronic storage systems, and the system must be able to reproduce records in legible form (IRS Publication 583). You may destroy the paper originals once the system has been tested and controls are in place (IRS Publication 583).
Closing the business does not end the periods. The last returns, the final payroll forms and the asset sale records still need their full time. Name one person who keeps the archive, and write the last destroy date on it.
- Sort records by rulebook: tax, wage-hour, immigration.
- Give each box or folder a destroy date from the longest rule that applies.
- Keep asset files open until the asset is gone, then add the period for that year.
- Before shredding, check state rules and any lender, insurer or contract that asks for more.
Questions people ask
How long do I need to keep business records for the IRS?
Usually 3 years from filing the return they support, 4 years for employment tax records, and longer for assets and for some special cases (IRS, How long should I keep records?).
How long do I keep Forms I-9 for former employees?
Keep each Form I-9 for 3 years after the date of hire or 1 year after employment ends, whichever is later (USCIS M-274, Retaining Form I-9).
How long should payroll records be kept?
At least 4 years for the employment tax side (IRS, How long should I keep records?). Under wage-hour rules, payroll records are kept 3 years and time cards 2 years (29 CFR 516.5) (29 CFR 516.6), so the tax period is the one to plan around.
Can I keep business records electronically?
Yes. The same rules apply to electronic storage, which must index, store and reproduce records in legible form; paper originals may then be destroyed once the system is tested (IRS Publication 583).
Sources
- IRS, How long should I keep records?: Income tax records for the period of limitations, employment tax records at least 4 years, and property records until the period ends for the year of disposal.
- IRS Publication 583: Supporting documents, gross receipts and asset records, and the rules for electronic storage systems.
- USCIS M-274, Retaining Form I-9: Keep Form I-9 for three years after the date of hire or one year after employment ends, whichever is later.
- USCIS, Form I-9: The current Form I-9 edition is 01/20/25; the 08/01/23 edition expiring 05/31/2027 may still be used, and the one expiring 07/31/2026 was valid only until that date.
- 2025 Instructions for Forms 1099-MISC and 1099-NEC: For payments made in 2025, Form 1099-NEC reports nonemployee compensation of $600 or more.
- Instructions for Forms 1099-MISC and 1099-NEC: For tax years beginning after 2025, the reporting threshold for these payments is $2,000.
- 29 CFR 516.5: Payroll records, certificates and agreements, and sales and purchase records are preserved at least 3 years.
- 29 CFR 516.6: Basic time and earnings cards and wage rate tables are preserved at least 2 years.
About the author
Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. Arthur Teboul.
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How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? Contact us.
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