How long to keep tax records: the IRS rules, in plain English

Every spring, shoeboxes and folders of old receipts raise the same question: what can I throw away? The IRS's answer is precise once you know the idea behind it. You keep a record as long as it could still matter for a return, and that is mostly a question of how long the IRS has to change the return and how long you have to amend it. This page lays out the periods, the exceptions that make them longer, the records to keep much longer, and an example.

The idea: the period of limitations

The IRS generally has a fixed window to assess more tax on a return, and you have a window to claim a refund. Together these are the period of limitations. You should keep the records that support each item of income, deduction and credit on a return until that return's period runs out. ^{1 2}

The clock starts when you file. A return filed early is treated as filed on the due date, so filing in February doesn't start the clock any sooner. ^{1 3}

The periods for income tax returns

^{1 2}

These periods come from the Code. The assessment periods, including the longer one for a large omission of income, are in section 6501; the refund periods, including the longer one for bad debts and worthless securities, are in section 6511. ^{3 4}

The usual answer is the first row. For most people with a straightforward return, filed on time, the supporting records for that year can go once the general period has passed. But the exceptions are why many advisers suggest keeping everything a little longer.

Records to keep much longer

Copies of your returns

Keep copies of the returns themselves. The IRS recommends it: they help when preparing future returns and if you ever amend. ¹ A return copy takes little space, and having old ones makes it easy to prove income or basis years later. We'd keep them for good.

Property records: until the property is sold, and then some

Records about property you own, such as a home, rental property, stock or business equipment, need to be kept until the period of limitations runs out for the year you sell or dispose of the property. You need them to figure depreciation and your gain or loss when you sell. ^{1 2}

So the closing statement and improvement receipts for a home bought decades ago are still live records today, if you haven't sold it. The same goes for brokerage purchase records, records of reinvested dividends, and records of stock received as a gift or inheritance.

If you got property in a tax-free exchange, your basis carries over from the property you gave up, so keep the records for both the old and the new property until the period runs out for the year you dispose of the new one. ¹

Other records to keep

• Nondeductible IRA contributions (Form 8606), until all IRA money is withdrawn: they show which part of a distribution isn't taxable.
• Carryovers, such as capital loss or charitable contribution carryovers: keep the records for the year the carryover started until the period runs out for the last year you use it.
• Health coverage records if you claim the premium tax credit. ²

Records needed for other reasons

Before shredding, check whether someone else wants them longer. The IRS notes that insurers and creditors may require you to keep records longer than it does. ¹

Business records

There's no required bookkeeping system for a business, but whatever you use has to clearly and accurately show income and expenses, and the records have to back up both. ² Employers keep employment tax records (payroll, deposits, Forms W-4 and the like) for the employment tax period in the table above. ¹

What to gather

• A folder (paper or digital) for each tax year with the return copy and its supporting records.
• A separate, permanent folder for each property: purchase, improvements, depreciation, sale.
• Forms 8606 and any carryover worksheets.
• For digital records, a backup copy somewhere other than the device you use every day.