The length of time a document must be retained depends on the action, expense, or event that the document records. While we recommend you keep copies of your tax returns forever, the IRS says that records that support items of income or deductions on a tax return need only be retained until the statute of limitations runs out.
Statute of limitations
The statute of limitations is the period of time in which a tax return can be amended to claim a credit or refund, or that the IRS can assess additional tax. For most taxpayers, that means keeping records for three years following the date of filing or the due date of the return, whichever is later.
For example, if you file your 2020 return on April 15, 2021, you’ll want to keep the records supporting them until April 15, 2025.
However, if you omit 25% or more of the gross income shown on your return, the statute of limitations is extended to six years, and if you file a fraudulent return or if you don’t file a return at all, the statute of limitations never runs out, so you’ll want to hold onto your records forever.
Beyond the statute of limitations
Under certain circumstances, you should keep your records even longer than three years:
Tax records may be needed for another reason
Even though records are no longer needed for tax reasons, they may be needed for other reasons.
For example, insurance companies and creditors often require records be maintained for a period beyond what the IRS requires. If you are still unsure of what records to keep, please contact your tax advisor for assistance.
Shred your tax records
Also, remember to shred anything containing personal information, such as your social security number, birthdate, credit card number, etc. Throwing such items directly into the trash may lead to identity theft.