How Long Should You Keep Your Tax Records?

The key to supporting your claims for tax credits, deductions and other tax breaks is to keep great records.  The question is what to keep and for how long.


Here are few guidelines:

As a rule, keep your tax records and supporting documentation until the statute of limitations runs out for filing returns or filing for refund.  For most taxpayers, that means three years following the date of filing or the due date of your tax return, whichever is later.  

If you don’t report all of the income that you should report (generally, if you omit more than 25% of the gross income shown on your return), the statute of limitations is extended.  You’ll want to keep those records for six years.

If you file a clearly fraudulent return or if you don’t file a return at all, the statute of limitations never runs out.

Supporting documentation for your tax returns includes not only forms W-2 and 1099, but also bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment and any other records to support deductions or credits you claim on your return.

You’ll want to keep your records organized, arranging them by year and storing them in a safe place.

Remember that even if records aren’t needed for tax reasons, you may need them for other reasons.  Make sure you check with your mortgage company and tax professional before tossing important records.


For more guidelines on tax record saving and to read the entire article, please visit www.forbes.com.