How Long to Keep Tax Records?
Most taxpayers don't know how long to keep
tax records for. Different sources seem to also have different
views of how long to keep tax records. The truth is different
tax records need to be kept for different lengths of time.
Also, different reasons to reuse tax records can lead to
taxpayers needed tax records that have expired by any other
reasons. Tax laws change often and there is always a chance
that you will need your old tax records. Some tax records need
to be kept indefinitely.
Why should I keep tax records?
Tax records should be kept so that your tax
returns are filed and prepared properly. The current IRS tax
laws do not require any special type of tax records to be kept
but taxpayers should keep all receipts, canceled checks and
other proof of payment plus other tax records used to claim tax
deductions, credits and exemptions.
How long do I have to keep tax records
The IRS says that taxpayers must keep tax
records for as long as they are important for the federal tax
How long to keep tax records for income and
Tax records for income and tax deduction
claims should be kept until the period of
limitations for the tax return runs out. The period of
limitation is the period of time after which no legal action
can be brought against the taxpayer for that item.
How long to keep tax records for assessment
For assessment tax owed, taxpayers
should keep all tax records for 3 years from the date they file
their tax returns.
How long to keep tax records for filing
claims for tax credit or refund?
For filing claims for credit or refund,
taxpayers should keep records for (whichever is later):
Will I ever have to keep tax records for
more than 3-5 years?
Yes, if you did not report income that you
should have on your previous tax returns and if the unreported
taxable income is more than 25% of your total income shown on
your return, then the IRS has 6 years to take action against
you and you need to keep your tax records for 6 years.
If your tax return is found to be false or
fraudulent with intent to evade tax or if no tax return is
filed for you, then the IRS can come after you any time even
if the issues happened 10-20 years ago. The IRS has
indefinitely to audit your tax return and assess penalties.