One of the most frequently asked questions by taxpayers is, “How long should I keep my tax records?”
On its website, the Internal Revenue Service (IRS) offers some guidelines.
Note: The IRS suggests taxpayers keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return.
1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. 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.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. 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.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
Tip adapted from IRS.gov[7]
[7] IRS.gov, September 10, 2020
