Which Tax Records to Keep, and for How Long

The rule behind the timelines

Record-keeping periods follow the period of limitations: the time during which you can amend a return to claim a refund, or the IRS can assess additional tax. Once that period ends for a given year, the records that support that year’s return are generally no longer needed for federal tax purposes.

How long, in most cases

For most people, the general rule is three years from the date you filed the return, or two years from when you paid the tax, if that’s later.

Some situations extend it. Keep records for six years if you didn’t report income that you should have, and it was more than 25% of the gross income shown on the return. Keep records for seven years if you claim a loss from worthless securities or a deduction for a bad debt. If you don’t file a return, or file a fraudulent one, there’s no time limit.

Businesses with employees should keep employment tax records for at least four years after the tax is due or paid, whichever is later.

Records that need to last longer

Some records support numbers you’ll use far in the future, and those need to be kept until the period of limitations ends for the year you use them.

Records for a home, such as the purchase closing statement and receipts for improvements, affect the gain when you eventually sell. They need to be kept for as long as you own the home, and then for the period of limitations after you report the sale.

Investment records showing what you paid, including reinvested dividends, determine your gain or loss when you sell. Brokerages now track cost basis for most investments bought in recent years, but older holdings and transfers may not be complete.

Records of nondeductible contributions to a traditional IRA, reported on Form 8606, matter when you eventually withdraw, so keep them until the account is fully withdrawn and the limitation period has passed.

Business assets, like equipment and vehicles, need purchase records and depreciation records for as long as you own them, plus the limitation period after you sell or dispose of them.

What to keep for each year

For a typical household, that means a copy of the filed return; forms reporting income, such as W-2s, 1099s and brokerage statements; records supporting deductions and credits, such as Form 1098 for mortgage interest, charitable receipts and childcare costs; and records of estimated tax payments.

For a business, it adds invoices and records of income, receipts for expenses showing what was bought and why, bank and card statements, mileage logs if you claim vehicle expenses, payroll records and asset records.

Keeping a copy of every filed return indefinitely is a good habit, even after the supporting records are gone. Returns are useful for loan applications, financial aid, Social Security questions and later tax years.

Paper or digital

The IRS accepts digital copies, as long as they’re accurate, complete and readable. Scanning receipts and keeping them in a backed-up folder by year makes records far easier to find and protects them from fading or loss. Lenders, insurers and state tax agencies may have their own requirements, and some states have longer limitation periods, so it’s worth checking yours.

The takeaway

Keep most tax records for at least three years after filing, longer in the specific situations the IRS describes, and keep records for homes, investments and business assets for as long as you own them and a few years beyond. Keeping every filed return is a simple safeguard.

If you’re running a business, separating business and personal money makes all of this much easier; see keeping business and personal money separate.

Written by the Maxint Content team and reviewed by the Maxint Editor team. How we create our content

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This article is general education about US personal finance, based on the assumptions and sources described in it. It isn’t financial, tax or legal advice, and examples use hypothetical people and figures.