NOW THAT I’VE FILED MY TAXES, HOW LONG DO I HAVE TO KEEP THESE RECORDS?

Written by Jim Worthington on April 14, 2019

The general rule is that you should keep records to support your tax return as long as the tax year is open. My advice is to keep most income tax records for six years after you file the return. 

The IRS generally has three years after you file the return to challenge it. The Tax Code extends this time period to six years if you under-report income by more than 25 per cent. That’s why I recommend keeping records for six years. Hopefully, you won’t have to defend the accuracy of your return, but it’s better to have the records if you need to do so. Finally, there is no time limit on the Service’s ability to challenge a false or fraudulent return.

By the way, these time limits affect your ability to claim a refund as well. Taxpayers can generally seek a refund up until the later of three years after filing the return or two years after paying the tax.

You should keep some records even longer:

• If a record relates to the basis for property, you should keep that record as long as you need to establish that basis.
• You should keep W-2s until you start receiving social security, just in case you need to prove your earnings to the Social Security Administration.

So, kudos to you if you filed your 1040 without an extension. But, your work is not complete until you file the supporting documents away and shred the ones that you no longer need.