How Long Do I Keep My Tax Returns?

Maintaining accurate tax records is an important aspect of personal financial management. These records serve as a comprehensive history of income, deductions, and credits, which are necessary for preparing current and future tax returns. Beyond tax preparation, organized records are essential for substantiating claims in the event of an inquiry from the Internal Revenue Service (IRS). Proper record-keeping helps individuals navigate potential audits and ensures compliance with tax regulations.

Standard Retention Periods for Tax Returns

The length of time you should keep tax records largely depends on the “period of limitations,” which is the timeframe during which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax. For most income tax returns, the IRS recommends keeping records for three years from the date you filed your original return or the due date of the return, whichever is later.

This three-year period is the general statute of limitations for the IRS to initiate an audit and assess additional taxes. If you filed your return before the due date, it is generally treated as filed on the due date for purposes of this three-year window.

For instance, if you filed your 2024 tax return on March 1, 2025, but the due date was April 15, 2025, the three-year period would typically begin on April 15, 2025. A longer retention period of seven years applies if you file a claim for a loss from worthless securities or a bad debt deduction.

Extended Retention Periods and Specific Document Needs

Certain circumstances require retaining tax records for periods longer than the standard three years. If you do not report income that you should have, and this unreported income is more than 25% of the gross income shown on your return, the IRS has six years to assess additional tax.

This six-year look-back period is triggered by a substantial omission of income, significantly extending the time your records need to be available. In cases of a fraudulent return or if you do not file a return at all, there is no statute of limitations, meaning records should be kept indefinitely. The absence of a filed return or the presence of fraud allows the IRS to pursue assessment and collection at any time.

Records related to property, such as purchase documents, improvement records, and sale documents, should be kept until the period of limitations expires for the year in which you dispose of the property. This typically means three years after filing the tax return for the year of sale. These documents are crucial for determining the cost basis, which affects any depreciation, amortization, or capital gain or loss calculations when the property is sold.

For self-employed individuals, employment tax records must be kept for at least four years after the date the tax becomes due or is paid, whichever is later. This ensures compliance with regulations concerning payroll and related taxes. Supporting documents, including W-2s, 1099s, receipts, canceled checks, and mileage logs, should generally be retained for the same period as the tax return they support.

Organizing and Disposing of Tax Records

Effective organization of tax records simplifies the process of tax preparation and makes it easier to retrieve documents if needed for an audit. You can choose to organize records physically, using labeled folders by year and category (e.g., income, medical expenses, charitable donations), or digitally. Digital organization involves scanning documents and saving them as PDFs, utilizing cloud storage, or using dedicated expense-tracking applications.

When storing digital files, it is advisable to use secure, encrypted platforms and maintain multiple backups to protect against data loss. Physical documents should be stored in a secure location, such as a fireproof safe or locked cabinet, to prevent damage or theft.

Once the applicable retention period for tax records has passed, secure disposal is important to protect personal and financial information. Physical documents containing sensitive data, such as Social Security numbers or bank account details, should be shredded using a cross-cut shredder. Simply throwing them in the trash could expose you to identity theft.

For digital files, ensure they are securely deleted from all storage locations, including cloud services and backup drives. Professional shredding services offer a secure option for bulk disposal of physical records, providing a certificate of destruction.