- Category: Individual Taxes
- Written by Madeline Delanni
- Hits: 2531
You’d think this would be a simple question with a simple answer; however, there are different time periods for different types of conditions. Here are a few:
1) If you owe additional tax, and you’ve followed the law then hang onto everything for 3 years.
2) If your reported income has a discrepancy of more than 25% than keep it all for 6 years.
3) If you file a claim for a loss from worthless securities then save files for 7 years.
4) However, if the IRS believes you filed a fraudulent return, then there is no limit to the time you’d need the documents to defend yourself.
The point is it varies considerably. Best bet is to keep them for as long as possible, just in case. There are many ways to store them in such a way as not to take up too much room. Get creative!
Here is the link for the IRS’s explanation. Scroll down about 3/4 of the way down, and look for “How Long To Keep Records.”