How Long to Keep Tax Returns After Death?

When an individual passes away, the responsibility for their final affairs, including taxes, falls to a designated person. This duty involves managing the deceased’s tax records. Knowing how long to retain these documents is a common question that arises during a difficult time.

Key Tax Documents to Retain

After a person’s death, the executor must gather and safeguard a specific set of financial documents. These records are the foundation for filing final tax returns and substantiating them if questions arise. Key documents to retain include not only the tax returns themselves but also all supporting documentation.

• The deceased’s final individual income tax return (Form 1040) and returns from at least three prior years.
• An estate income tax return (Form 1041), if the estate itself generates income from sources like investments or rental property.
• A federal estate tax return (Form 706), which is required for estates valued over $13.99 million for individuals passing away in 2025.
• Any gift tax returns (Form 709) that the deceased filed during their lifetime.
• Supporting documents such as Forms W-2, various Forms 1099, and Schedules K-1 from partnerships or S corporations.
• Brokerage statements and records detailing the purchase price and any improvements to property, which are needed to establish the tax basis of assets.

Determining the Retention Period

The length of time you must keep tax records is dictated by the IRS’s “period of limitations,” which is the timeframe for an audit or amendment. The general rule is to keep records for three years from the date the tax return was filed or the return’s due date, whichever is later. For example, if a 2023 tax return was filed on April 15, 2024, the records should be kept until at least April 15, 2027.

Certain circumstances extend this standard retention period. If a tax return includes an understatement of income omitting more than 25% of the gross income that should have been reported, the IRS has six years to conduct an audit. This means records must be kept for six years from the filing date or due date.

A specific rule applies to claims for losses from worthless securities or bad debt deductions, requiring a retention period of seven years. In cases where a fraudulent return was filed or no return was filed at all, the records must be kept indefinitely because there is no statute of limitations. It is also a good practice to check for any specific state tax agency requirements, as their retention periods may differ from federal guidelines.

The Executor’s Responsibility

The person legally charged with managing a deceased person’s estate is known as the executor, administrator, or personal representative. This individual is appointed by a court and assumes a fiduciary duty to act in the best interests of the estate and its beneficiaries. This duty involves the management and protection of the estate’s assets, including all financial and tax records.

The executor must ensure that all of the deceased’s final tax returns are accurately prepared and filed on time. This includes the final Form 1040 and potentially an estate income or federal estate tax return. The executor is accountable for paying any taxes due from the estate’s assets.

The executor’s duty to safeguard records continues until the estate is formally closed and all potential audit periods have expired. They must be aware of the different retention timelines, from the general three-year rule to longer periods for specific situations. Prematurely destroying records could leave the executor personally liable if an audit occurs and the necessary documentation is unavailable.

Securely Disposing of Records

Once the required retention periods have passed, the task of disposing of old tax records begins. These documents contain sensitive personal information, such as Social Security numbers and financial data. Improperly discarding them creates a risk of identity theft, which can cause problems for the estate or beneficiaries.

To mitigate this risk, all documents should be destroyed securely. A cross-cut or micro-cut shredder is an effective method for personal use, turning paper into unreadable particles. For larger volumes of records, hiring a professional shredding service is a reliable option that may provide a certificate of destruction.

While many documents can be destroyed, some should be kept by the beneficiaries indefinitely. Records that establish the cost basis of inherited property, such as real estate or stocks, are important. When the beneficiary eventually sells the inherited asset, they will need this information to calculate the taxable gain. Providing these basis records to the beneficiaries is a final step for the executor.