How Long Contractors Should Keep Tax Records (Short Answer)

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Contractors ask me this every year:“George, how long do I actually need to keep tax records?”

Here’s the real answer — no fluff 👇

The basics:• IRS standard audit window: 3 years• If income is underreported by 25%+: 6 years
Contractor rule of thumb: keep tax returns + support for 6 years

Some records must be kept longer:

🏗 Property & buildingsKeep until sold + 3 years(Improvement records reduce taxes when you sell)

🚜 Equipment & vehiclesKeep while owned + 3 years after sale

💸 Bad debts / unpaid jobsKeep up to 7 years

🏦 IRAs & retirement accountsKeep until emptied + 3 years

Important contractor notes:• If you deduct it, you need proof• Digital records are fine• Deleting old bank/QB files too early causes audit problems

Bottom line:Storage is cheap.IRS disputes are not.

If you’re unsure whether to shred something — don’t.Or ask your CPA first.