How Long Should I Keep My Tax Records After Filing My Income Tax Return?

How Long Should You Keep Your Tax Records?

1. Keep Records for Three Years:

In most cases, it's recommended to keep your tax records for at least three years after the date you filed your tax return or the tax return's due date, whichever is later. 

This period allows you to retain documentation in case of audits or questions from tax authorities.

2. Keep Records for Six Years:

If you've underreported your income by more than 25%, the IRS has six years from the date you filed your tax return to assess additional taxes or initiate an audit. 

Therefore, it's advisable to keep your tax records for at least six years to cover this extended period.

3. Keep Records Indefinitely:

Keep tax records indefinitely, especially those tied to significant transactions or investments, such as copies of tax returns and related forms.

Records of real estate transactions, including deeds, closing statements, and home improvement receipts.

Records of investments, such as purchase and sale confirmations, dividend reinvestment statements, and retirement account statements.

Records of major purchases, such as vehicles, jewelry, or collectibles, which may affect capital gains or losses in the future.

Records related to business ownership, including incorporation documents, partnership agreements, and financial statements.

4. Electronic Records: You may keep electronic copies of your tax records instead of paper copies, as long as they are accurate, complete, and legible. Be sure to back up electronic records regularly and store them securely.

5. Secure Storage:

Store your tax records in a safe and secure location, such as a locked file cabinet, safe deposit box, or encrypted digital storage. 

Protect sensitive information, such as Social Security numbers, bank account numbers, and tax identification numbers, from unauthorized access.