How Long Should I Keep Tax Records?

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This article covers different scenarios in regards to filing personal income tax returns and their duration of period of limitation.

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Each year it is common for American’s to ask themselves one of all of the following questions about how long they should keep their tax records.

How long should I keep my tax records?
Should I just keep the return?
Or, do I need to keep the receipts too?

These are just a few of the common questions asked each year by Americans in regards to keeping tax records. There are likely many more.

What does the IRS say about how long you should keep your tax records?

Specifically, the IRS says the following,

The length of time you should keep a document depends on the action, expense, or event which the document records. Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.

What does ‘period of limitations’ mean?

The period of limitation is the period of time that you can amend your tax return to claim a credit or refund. In addition, this is also the period of time that the IRS can assess additional tax.

When do the period of limitation begin?

The period of limitation begins after the return was filled. So if you file a return late, the period of limitation begins from the date you filed the return, not the date the return was actually due. Please note that returns filed before the due date are treated as filed on the due date. What is the actual period of limitations?

What specifically are the period of limitations?

  • You are required to keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
  • You are required to keep records for 7 years if you file a claim for a loss from worthless securities or bed debt deduction.
  • You are required to keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
  • You are required to keep your records indefinitely if you do not file a return.
  • You are required to keep your records indefinitely if you file a fraudulent return.
  • You are required to keep employment tax records for at least 4 years after the date that the tax return becomes due or is paid, whichever is later.

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