How Long Should You Keep Your Tax Records?

Even if you have filed your taxes, and received your refund, this doesn’t mean you should throw out your tax records.

Rather, there is a set of guidelines that you can, and should, follow, when it comes to holding onto your tax records in the event that they are needed later.

Being aware of these guidelines, and speaking with a tax professional, will make it easier to manage your taxes and deal with a potential audit.

How Long Should You Keep Your Tax Records?

Right before we answer the question outlined above, there is one key fact we must clarify: the IRS has exactly three years to initiate an audit, and this period begins right after you file your taxes.

Just as an example, if you file your 2023 taxes on April 11th of 2024, then the IRS can initiate at any time until April 11th of 2027.

Given this fact, you should, at the very least, keep your tax records for at least three-years. But, even though this is wise, there is one other fact to be aware of: during an audit, the IRS can expand their audit window to six-years.

Regarding the above, if you are audited for your 2023 taxes, then they can look at your records from 2020, 2021, and 2022.

To ensure that you comply with this tax audit, it is of the utmost importance that you have the tax records that pertain to those years.

If, throughout the course of the IRS audit, they begin to suspect fraud, then there is no limit to how far back they can look into your taxes.

Given the facts outlined above, you should keep your tax records for at least six years.

To be on the safe side, though, it is wise to keep all of your tax records indefinitely, in the event that you need to refer back to them.

What Tax Documents Should You Save?

A variety of tax documents should be saved indefinitely. Some of these tax documents are as follows:

• The documents that report your income, such as W-2 statements and 1099 forms.
• The receipts for any tax deductions that you claimed.
• The receipts for charitable contributions and, in turn, the tax write-offs you claimed.

Outside of these documents, there are a variety of other documents that pertain to specific purchases and investments you must save. Some of the most important of these documents are as follows:

• Records that clarify your purchase of specific investments, such as real estate.
• Records that clarify the investments you received as a gift.
• Records that clarify the investments you received as an inheritance
• Any and all business documentation..

To go along with the above documents, you must also save these documents:

• Your birth certificates.
• A divorce decree, if relevant.

In the event of an audit, these documents may be necessary, in order to establish your tax status and the tax status of your children.