How Long to Keep Tax Records: A US Retention Guide

The Governing Rule

Keep Records As Long As They May Be Needed

"You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code."

In practice, "as long as they may be needed" means the period of limitations for the return, the window during which you can amend it to claim a credit or refund, and during which the IRS can assess additional tax. Once that window closes for a given year, the records tied to it can usually go. The table below shows how long each window runs.

Why It Matters

What Good Records Actually Do for You

Keeping records is not box-ticking. Supporting documents let you respond to an IRS inquiry with minimal effort, and avoid penalties. They serve four main purposes:

01

Identify Sources of Income

Records show where your money came from, so you can separate taxable income from non-taxable and report each correctly.

02

Track Deductible Expenses

Without a record, a deduction is a memory. Documentation is what lets you actually claim what you are entitled to.

03

Keep Track of Property Basis

Basis records support the gain or loss you report when you eventually sell, and they can be needed for years after the purchase.

04

Prepare Accurate Returns

Complete records make each year's return faster to prepare and easier to defend if a question is ever raised.

The Core Reference

Period of Limitations, at a Glance

Find the situation that matches your return, then keep the records for that year until the period shown has passed.

Retention periods keyed to the IRS period of limitations.
If This Describes Your Return	Keep Records For
You owe additional tax and none of the situations below apply	3 Years
You did not report income that you should have, and it is more than 25% of the gross income shown on the return	6 Years
You file a claim for a credit or refund after filing your return	Later of 3 Years, or 2 Years After Tax Was Paid
You file a claim for a loss from worthless securities or a bad-debt deduction	7 Years
You file a fraudulent return	No Limit
You do not file a return	No Limit

The Exceptions

Records With Their Own Rules

Some records outlive the standard limitation windows, because they support a number you will need years down the line. Hold these longer:

Record types that must be kept beyond the standard period.
Record Type	Keep It Until
Property records (purchase, improvements, basis)	The period of limitations expires for the year you dispose of the property in a taxable transaction
Form W-2 (Copy C)	You begin receiving social security benefits
IRA records (Form 5498, Form 1099-R, Form 8606)	All distributions have been made from your IRA(s)

Why Property and Basis Records Run So Long

You keep property records until the period of limitations expires for the year you sell, because that is the year they finally get used, to prove your basis and calculate the gain or loss. If you received property in a nontaxable exchange, carry the old records forward too, since the basis of the new property depends on the basis of the old.

One More Reason

The IRS Is Not the Only One Who Asks

Even after the IRS window closes, keep records longer if someone else may need them. Insurance companies and creditors often want tax records kept longer than the IRS does, so check any requirements they have set before you shred anything. When in doubt, the safer move is to keep the record.

Not Sure Which Window Applies to You?

Living abroad, amending old returns, or carrying property across borders can all change how long you need to hold a record. If your situation is not a clean fit for the table, we will tell you exactly what to keep and for how long.

Talk to a Specialist

Kinds of records to keep

Proof of Income and Expense

Basic records are the documents everybody should keep — the ones that prove your income and your expenses. If you own a home or investments, your basic records should contain documents related to those items too.

Table 1. Proof of Income and Expense — documents to keep as basic records.
FOR items concerning your…	KEEP as basic records…
Income	Form(s) W-2 · Form(s) 1099 · Bank statements · Brokerage statements · Form(s) K-1
Expenses	Sales slips · Invoices · Receipts · Cancelled checks or other proof of payment · Written communications from qualified charities
Home	Closing statements · Purchase and sales invoices · Proof of payment · Insurance records · Receipts for improvement costs
Investments	Brokerage statements · Mutual fund statements · Form(s) 1099 · Form(s) 2439

Income. Your basic records prove the amounts you report as income on your tax return. Your income may include wages, dividends, interest, and partnership or S corporation distributions. Your records also can prove that certain amounts are not taxable, such as tax-exempt interest. Note: if you receive a Form W-2, keep Copy C until you begin receiving social security benefits. This will help protect your benefits in case there is a question about your work record or earnings in a particular year.

Expenses. Your basic records prove the expenses for which you claim a deduction (or credit) on your tax return. Your deductions may include alimony, charitable contributions, mortgage interest, and real estate taxes. You also may have child care expenses for which you can claim a credit.

Home. Your basic records should enable you to determine the basis or adjusted basis of your home. You need this information to determine if you have a gain or loss when you sell your home, or to figure depreciation if you use part of your home for business purposes or for rent. Your records should show the purchase price, settlement or closing costs, and the cost of any improvements. They also may show any casualty losses deducted and insurance reimbursements for casualty losses. When you sell your home, your records should show the sales price and any selling expenses, such as commissions.

Investments. Your basic records should enable you to determine your basis in an investment and whether you have a gain or loss when you sell it. Investments include stocks, bonds, and mutual funds. Your records should show the purchase price, sales price, and commissions. They may also show any reinvested dividends, stock splits and dividends, load charges, and original issue discount (OID).

Proof of payment

What Each Kind of Payment Record Must Show

One of your basic records is proof of payment. Proof of payment alone is not proof that the item claimed on your return is allowable — you should also keep the documents that show the item itself qualifies. Generally, you prove payment with a cash receipt, financial account statement, credit card statement, cancelled check, or substitute check. If you make payments in cash, get a dated and signed receipt showing the amount and the reason for the payment.

Table 2. Proof of Payment — what the statement must show.
IF payment is by…	THEN the statement must show the…
Cash	Amount · Payee’s name · Transaction date
Check	Check number · Amount · Payee’s name · Date the check amount was posted to the account by the financial institution
Debit or credit card	Amount charged · Payee’s name · Transaction date
Electronic funds transfer	Amount transferred · Payee’s name · Date the transfer was posted to the account by the financial institution
Payroll deduction	Amount · Payee’s name · Date the amount was withheld