How long are you supposed to keep tax records?
I am cleaning out my files and I need to know how far back I need to keep old tax returns and related paperwork.
Dear M: Great question and the answer is not very simple.
3 years is the normal time for a generic return.
10 years is the amount of time the IRS can enforce collections.
Depreciation schedules run from 3 years to 39 years.
I would think most (90% +) 3 years is a good number. If you have any depreciation schedules I would keep the return as long as you are depreciating the item. Most soft ware programs can calculate the depreciation so even this suggestion is very conservative.
Even if you shred the return you may want to scan and keep all W2 1099 info and save it to a disc.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more Errol Quinn Enrolled Agent
IRS will tell you 3 yrs, safely 7
Technically none, but 5 years is a good idea, many say 7.
Legally, 7 years.
IRS can only go back 3 years. So now that is 2010 -- they can audit you on 2007 returns.
However, if you committed fraud --- they can go back how far they want to.
3 years at a MINIMUM, but seven years is commonly suggested.
Forever is another suggestion. In fact, when you get those green and white social security statements, they say to hang onto wage records (W-2's) for all years for proof. Not very practical, but that is literally every W-2 you ever receive.
Start scanning and then shred your records.
IRS will now accept electronic scans in lieu of paper receipts. Remember those thermal-printed receipts you've been saving? They're now nothing more than blank pieces of paper.
How far back can the IRS go? Until the moment you first started breathing.
If you ever saw the movie "Casino", there's a scene near the end of the movie where one of the mob bosses is talking to some of the other bosses in a private room during a break in their trial.
They're talking about Robert DeNiro's character and say "He's a stand up guy", "He's always been a guy we could count on". But the final decision to whack or not to whack "The way I look at it, why take a chance?"
Scanners are fairly inexpensive so why not just scan and shred?
"Why take a chance?"
To not repeat and just to add to what has already been answered here, if you have any investments, IRAs, Treasuries, real estate and the like, it is best to keep those records for as long as you hold the asset. You need to keep information such as purchase date, cost, number of shares, contributions to IRA's and what taxes have been paid on contributions. For real estate, keep records of all maintenance and repairs; for cost basis on your taxes, until your it is sold. Digital copies are fine so you don't have to keep all those papers.