You should generally keep your tax returns and supporting documents for at least three years from the date you filed your original return or from the date you paid the tax, whichever is later. This is because the IRS typically has a three-year statute of limitations to audit your return or assess additional tax
. However, there are important exceptions where you should keep records for longer:
- Seven years if you file a claim for a loss from worthless securities or a bad debt deduction
- Six years if you did not report income that is more than 25% of the gross income shown on your return
- Indefinitely if you did not file a return or if you filed a fraudulent return, as there is no statute of limitations in these cases
- Employment tax records should be kept for at least four years after the tax is due or paid
- Keep records related to assets such as stocks or your home until the statute of limitations expires for the year in which you sell them, to support capital gains or losses
If you want to be extra cautious, many experts recommend keeping copies of your tax returns indefinitely, especially if you store them digitally, since space is not a concern and it can help resolve any future disputes with the IRS or state tax authorities
. In summary:
- Minimum retention: 3 years
- For bad debt/worthless securities: 7 years
- For substantial unreported income: 6 years
- No return or fraud: Indefinitely
- Employment taxes: 4 years
- Investment and property records: Until sold + statute of limitations
Always keep your tax returns even after you dispose of supporting documents, as they help prepare future returns and prove your tax history
. Dispose of old tax documents securely by shredding to protect your personal information
