With the April 15 tax filing deadline behind you, it’s tempting to shift your focus back to running your business and move taxes to the back burner. That’s understandable. But before you do, there are a few important after‑tax‑day items that can protect your business, reduce stress, and help you stay prepared if the IRS ever comes calling.
At CD Bradshaw & Associates, P.C., we believe tax season doesn’t end on April 15. Smart, intentional decisions made after you file can make next year’s tax season smoother and help you avoid unnecessary surprises.
Understanding the IRS Statute of Limitations
One of the most common questions we hear from small business owners is, “How long do I need to keep my tax records?”
In most cases, the IRS has three years from the later of your tax return’s due date or filing date to audit your return. However, there are important exceptions business owners should understand:
- If income is understated by 25% or more, the audit window extends to six years
- If no return was filed, or if fraud is suspected, there is no statute of limitations
Because of this, we recommend keeping copies of your filed tax returns indefinitely as proof of filing. Supporting documentation should generally be retained at least until the statute of limitations expires and often longer, depending on the situation.
Which Tax Records Can You Safely Discard?
Using the standard three‑year rule, in late April 2026, most taxpayers who filed their 2022 return by the April 2023 deadline can generally discard supporting records tied to that return.
If you filed a 2022 return on extension, those records could remain subject to audit until October 2026. For added peace of mind, many business owners choose to retain supporting records for six years.
When in doubt, keeping records longer is usually safer than discarding them too soon.
Tax Records Small Business Owners Should Keep
Records to Keep for at Least Three Years
Documentation supporting income, deductions, and credits should generally be retained for at least three years. This may include:
- Forms 1099, including 1099‑NEC, 1099‑MISC, and 1099‑G
- Form 1098 for mortgage interest
- Property tax payment records
- Charitable contribution receipts and acknowledgments
- Records for Health Savings Accounts and Section 529 plans
- Documentation for deductible retirement plan contributions
These records are essential if questions arise or if you need to amend a return.
Records to Keep Longer Than Three Years
Some tax records should be retained well beyond the standard audit window:
- Forms W‑2 should be kept until you begin receiving Social Security benefits, as they may be needed to verify earnings
- Investment and real estate records should be retained for as long as you own the asset, plus at least three years after the sale is reported
- Retirement account records should be kept until the account is fully depleted and reported, plus three to six additional years
- Carryover documentation, such as charitable deductions or casualty losses, should be retained until they no longer affect your tax return, plus seven years
- Bad debt and worthless security records should be kept for seven years, as refunds can be claimed during that period
After‑Tax‑Day Habits That Pay Off All Year
Staying organized throughout the year puts you in a stronger position when it’s time to file again and makes any IRS inquiry far less stressful.
For example:
- Self‑employed individuals using a personal vehicle for business should maintain a mileage log with dates, mileage, purpose, and destination
- Business owners who donate to charity should retain receipts and written acknowledgments, especially for larger contributions
Good recordkeeping isn’t just about compliance. It creates clarity and confidence in your financial decisions.
Reassessing Withholding and Estimated Tax Payments
After tax season is also an ideal time to review your tax withholding and estimated payments.
If you owed taxes this year, you may want to increase withholding or estimated payments. If you received a large refund, adjusting payments could improve cash flow throughout the year. Life changes such as marriage, divorce, or adding a child may also warrant an update to your Form W‑4.
For those making estimated tax payments, changes in self‑employment income, investment income, or other non‑wage income may require adjustments. To help avoid underpayment penalties, many taxpayers aim to pay at least 100% of the prior year’s tax liability, or 110% for higher‑income earners, through withholding or quarterly estimated payments.
What to Do If You Receive a Letter from the IRS
Receiving mail from the IRS can be unsettling, but not every letter is bad news.
Often, IRS letters simply address math errors or minor adjustments. If you agree with the change, no response may be required. If the IRS proposes a change based on third‑party information, following the instructions and responding on time is critical.
In some cases, a letter may notify you of an audit. Most audits today are correspondence audits, conducted by mail and limited in scope. According to the IRS, the majority involve returns filed within the last two years.
Ignoring an IRS letter can lead to disallowed deductions and a Notice of Deficiency, meaning taxes may be assessed without your input.
Be Proactive and Stay Prepared
Organizing records now, maintaining good habits throughout the year, and proactively adjusting tax payments can lead to a smoother filing season and fewer surprises. These steps also put you in a stronger position if questions ever arise.
At CD Bradshaw & Associates, P.C., we do more than compliance. We help small business owners and contractors stay organized, prepared, and confident long after tax day, so record‑keeping decisions and IRS notices never catch them off guard.
