What Counts as a Tax Record
Tax records are the documents that back up your return, such as receipts and canceled checks. They prove the income you reported and any deductions or credits you claimed.
Keep a copy of each return you file, too. The IRS recommends saving filed returns because they help you prepare future returns and amended returns. An amended return is a corrected version of a return you already filed.
How the Period of Limitations Works
Under IRS recordkeeping rules, you should keep records as long as they might matter for your return. Generally, that means until the period of limitations for that return expires.
The period of limitations is the amount of time you have to amend your return to claim a credit or refund. It’s also the time the IRS has to assess more tax. Once that window closes for a given year, you generally no longer need that year’s supporting records.
The clock usually starts on the date you file. If you file before the due date, your return is treated as filed on the due date.
How Long to Keep Tax Records in Each Situation
The 3-year rule covers most filers, but IRS retention guidelines set longer periods for certain situations. Find the row that matches yours.
| Your situation | How long to keep records |
|---|---|
| You filed a return and no other row applies | 3 years from the date you filed |
| You filed a claim for a credit or refund after filing your return | 3 years from filing the original return or 2 years from paying the tax, whichever is later |
| You left off income that’s more than 25% of the gross income shown on your return | 6 years |
| You left off income from foreign financial assets that’s more than $5,000 | 6 years |
| You claimed a loss from worthless securities or a bad debt deduction | 7 years |
| You didn’t file a return | Indefinitely |
| You filed a fraudulent return | Indefinitely |
| You’re an employer keeping employment tax records | At least 4 years after the tax becomes due or is paid, whichever is later |
If more than one row applies to you, follow the longest period.
When Property Records Need to Last Longer
Property records follow a different clock than the table above. That clock starts with the year you get rid of the property.
Property You Own
Keep records about property until the period of limitations expires for the year you dispose of it. You need these records to figure your basis and any depreciation. They also show your gain or loss when you sell.
Basis is the value the IRS uses as your starting point to figure gain or loss, often what you paid for the property. Depreciation is a deduction that lets you recover the cost of certain property over time.
Property From a Nontaxable Exchange
A nontaxable exchange is a trade of property where you don’t owe tax at the time of the trade. In that case, keep records on both the old and new property. Hold them until the period of limitations expires for the year you dispose of the new property.
Check Other Requirements Before You Discard Records
Even after the IRS period of limitations ends, your records may still be useful to someone else. Before you throw anything out, check whether your insurance company or creditors require you to keep records longer.
