How Long Should I Keep Federal Income Tax Records?

It is important to retain tax returns forever.

When to Discard

The Internal Revenue Service normally has up to 3 years to audit a tax return. After that time, material such as canceled checks, receipts, pay stubs and other supporting documents may be discarded. However, financial advisers do recommend that copies of the tax returns themselves be retained forever.

Special Circumstances

If you understated your income on a federal tax return by more than 25 percent, the IRS has the right to audit that return for up to 6 years. If you failed to file, or filed a fraudulent return, there is no time limit beyond which the IRS cannot audit you. Supporting records should be kept appropriately.

Bottom Line

Retain tax records until there is no possibility the IRS will audit that year's return. Additionally, records related to assets such as investments or real estate which may affect your taxes should be retained for as long as you own the asset.

References

• IRS Article - How Long Should I Keep Records?
• IRS Publication 552 - Tax Records
• Kiplinger - Which Tax Records to Keep