Steps To Start
Click on the links below to walk through the important steps to starting a business.
- Step 1: Accounting Method
- Step 2: Business Expenses
- Step 3: Business Start-up Costs
- Step 4: Business Use of Home
- Step 5: Car Expenses
- Step 6: Depreciation Car Expenses
- Step 7: Employer Identification
- Step 8: Estimated Tax
- Step 9: Forms of Business
- Step 10: Recordkeeping
- Step 11: Kinds of Records to Keep
- Step 12: How Long To Keep Records
- Step 13: Self-Employment Tax
Start A Business
Step 12: How Long To Keep Records
You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out.
The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. The following contains the period of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.
| In the following situations: | The period of limitations is: |
| You owe additional tax and situations (2), (3), and (4), below, do not apply to you. | 3 years |
| You do not report income that you should report, and it is more than 25% of the gross income shown on your return. | 6 years |
| You file a fraudulent income tax return. | No limit |
| You do not file a return. | No limit |
| You file a claim for credit or refund after you file your return by filing Form 1040X. | Later of: 3 years, or 2 years after tax was paid |
| Your claim is due to a bad debt deduction. | 7 years |
| Your claim is due to a loss from worthless securities. | 7 years |
