How Long To Keep Tax 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 items shown on your return until the period of limitations for that return runs out. The requirements on keeping these records may vary for each state.

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 table below contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period beginning after the return was filed. Returns filed before the due date are treated as being filed on the due date.

Limitations Period of Limitations
Additional tax and (2), (3), and (4) do not apply to you 3 years
Not reporting income that you should and (only when it is more than 25 % of the gross income shown on your return) 6 years
Filing a fraudulent return No limit
Not filing a return No limit
Filing a claim for credit or refund after you filed your return Later than 3 years or 2 years after tax was paid
Filing a claim for a loss from worthless securities 7 years

Kinds of Records To Keep

Basic records

Basic records are documents that everybody should keep. These are the records that prove your income and expenses. If you own a home or some investments, your basic records should contain documents related to those items. This table lists documents you should keep as basic records. Following are examples of information you can get from these records.

Items Basic records
Income
  • Form(s) W-2
  • Form(s) 1099
  • Bank statements
  • Brokerage statements
  • Form(s) K-1
Expenses
  • Sales slips
  • Invoices
  • Receipts
  • Canceled checks
  • Written communications
Home
  • Closing statements
  • Purchase and sales invoices
  • Proof of payment
  • Insurance records
  • Receipts for improvement
Investments
  • Brokerage statements
  • Mutual fund statements
  • Form(s) 1099
  • Form(s) 2439

Income

Your basic records prove the amounts you report as income on your tax return. Your income may include wages, dividends, interest, and partnership or S corporation distributions. Your records also can prove that certain amounts are not taxable, such as tax-exempt interest.

Expenses

Your basic records prove the expenses for which you claim a deduction (or credit) on your tax return. Your deductions may include alimony, charitable contributions, mortgage interest, and real estate taxes. You also may have child care expenses for which you can claim a credit.

Home

Your basic records should enable you to determine the basis or adjusted basis of your home. You need this information to determine if you have a gain or loss when you sell your home or to figure depreciation if you use part of your home for business purposes or for rent. Your records should show the purchase price, settlement or closing costs, and the cost of any improvements. They also may show any casualty losses deducted and insurance reimbursements for casualty losses.

Investments

Your basic records should enable you to determine your basis in an investment and whether you have a gain or loss when you sell it. Investments include stocks, bonds, and mutual funds. Your records should show the purchase price, sales price, and commissions. They may also show any reinvested dividends, stock splits and dividends, load charges, and original issue discount (OID).