How Long to Keep Tax Returns and Records

Most people know that their tax returns and tax records contain important, sensitive information. Does that mean, however, that you have to keep them forever? The answer is not necessarily. Instead, you should keep records for various amounts of time depending on the exact situation.  

The Magic 3

In most cases, you should keep all tax-related information for at least 3 years. Why is 3 the “magic” number? Well, it’s because the IRS always has 3 years to audit any return you file. After that time, providing your return wasn’t fraudulent, you’re in the clear and can dispose of the information.

Remember, though, to do so correctly. Careful shredding and disposal of paper materials is always advisable. And, you might want to keep a digital copy of the information just in case.  

If You Fail to File  

Sometimes, in life, things happen. And, sometimes, those things may keep you from filing your return. When that happens, absolutely do not dispose of your tax records until you have filed, even if you file late. Then, be sure to hold onto that information for at least three years from your filing date.  

Special Circumstances  

As is true with most things related to the IRS, there are some exceptions to the general tips above. For example, if you’ve filed a claim for a loss from worthless securities, the IRS recommends holding onto your records for 7 years. Similarly, if you have employment tax records, it recommends holding onto that information for 4 years.  

What if you have a special situation not detailed above? Or, maybe you already disposed of your records and need to find a way to access them again. In any case, you can always turn to a tax professional for advice and guidance. They tend to have the most direct line to the IRS and can help you to overcome just about any tax hurdle.