There are very good reasons to keep certain tax files: You may need to amend your return or maybe even — gulp — comply with an IRS audit. But even with these scenarios in mind, how long do you really need to keep those receipts, W-2s, and other tax documents? Here are guidelines for saving your previously filed tax returns and corresponding documents.
The Three-Year Rule for Paperwork
In typical filing situations, the IRS has three years to audit your return, which means you should keep your records stored for three years from the date you filed or the due date of the return — whichever is later. For example, if your tax return is due April 15, but you file early, the statute runs exactly three years after the due date. If you file late and do not have an extension, the statute of limitation applies to the three years following your filing date. You also have three years from the date you filed, or two years from the date you paid the tax, to file any additional claims or refunds. Note that filing an amended claim doesn’t restart the three-year statute of limitations.
What tax documents do I need to keep?
Generally, you should keep all records that support your taxable income, a deduction, or a credit shown on your tax return for three years.
- Bank and brokerage statements
- Interest and dividend income
Expenses and Deductions:
- Receipts for business expenses such as mileage, supplies, utilities, advertising, meals, etc.
- Child care and education costs
- Charitable donation receipts
- Medical receipts
- Contributions to tax-deferred retirement accounts (401(k), IRA)
- Closing statements
- Purchase and sales invoices
- Home-buyer and homeowner tax credits
- If you underreport your income by more than 25 percent, the period of limitations is doubled: The IRS has six years to decide whether to audit your return.
- If you file a claim for a loss of worthless securities or a bad debt deduction (a debt that becomes uncollectible), you must keep records for seven years.
- If you file a fraudulent return or don’t file one at all (not recommended), the statute of limitations never expires and you will need to keep records indefinitely should the IRS decide to investigate.
Filed Taxes Storage Tips
Use what works best for you, as long as it allows you to produce the material if the IRS audits. Once the statute of limitations has passed, confirm that you do not need to keep your records for other purposes; certain creditors and even some insurance companies may require you to keep records longer than the IRS does. When it’s time to let go of most documents and receipts, keep the tax return to consult when filing future returns.
A version of this article appeared in our partner magazine, The Essential Tax Guide: 2023 Edition.