Direct answer
As of August 2026, a physician or medical practice should not apply one retention period to every document. Keep records long enough to support the related return, deduction, credit, asset basis, payroll filing, entity transaction, open notice, amended return, or other unresolved matter; employment-tax records generally require at least four years under IRS guidance, while some asset and basis records may be needed much longer.
Tie retention to the transaction and return
Index each record by entity, tax form, period, account, transaction, and filing. Keep copies of filed returns and the documents needed to explain reported income, deductions, credits, payments, elections, and ownership changes.
Keep asset and basis records through disposition
Retain purchase documents, improvements, depreciation, amortization, Section 179 treatment, casualty information, debt, allocations, and sale records until the disposition year and related limitation period are complete. Entity and shareholder basis records may span many years.
| Record category | Retention decision |
|---|---|
| Filed returns | Keep complete signed or accepted copies and proof of filing and payment for future reference |
| Income and expenses | Retain source documents through the applicable return limitation period and any open matter |
| Employment taxes | IRS guidance generally calls for at least four years; confirm the starting date and other applicable rules |
| Assets and depreciation | Keep acquisition, basis, use, depreciation, improvement, and disposition support through the disposition period |
| Entity and owner basis | Preserve contributions, distributions, debt, income, loss, elections, transfers, and annual basis computations |
| Notices and disputes | Keep the notice, response, evidence, submission proof, decision, and related return while the matter and rights remain open |
Extend retention for open or non-tax needs
Do not destroy records tied to an examination, notice, appeal, amended return, loss carryforward, litigation hold, loan covenant, transaction, insurance claim, employment matter, or professional licensing requirement. Legal and healthcare-record rules require separate review.
Control access and disposal
Restrict payroll, tax, banking, and ownership records to authorized users; maintain tested backups; document retention holds; and use secure disposal. Tax retention does not authorize unnecessary storage of patient information.
Primary sources
Frequently asked questions
Is seven years the correct retention period for every tax record?
No. Retention depends on the record, return, event, applicable limitation period, and open issues. Some documents can have shorter or much longer useful lives.
Can a practice keep only scanned records?
Electronic records may be appropriate if they remain complete, legible, secure, accessible, and connected to the accounting and tax records. Other legal or contractual requirements may apply.
Do tax-record rules determine how long to keep patient records?
No. Patient-record retention is governed by separate federal, state, professional, payer, and legal requirements that require qualified guidance.