Record Retention Guide
How long should you keep tax returns, statements, and financial records? Use this guide to know what to keep and what you can safely toss.
A simple record retention guide
Holding on to the right financial records protects you if the IRS ever has questions and makes tax time far easier. Still, keeping every scrap of paper forever is not the answer either. This record retention guide shows how long to keep tax records and other important documents, so you can stay organized without drowning in clutter. As a general rule, keep tax-related records for at least seven years, and keep a few key documents permanently.
Why seven years?
The IRS can generally audit a return for three years after you file it. However, that window stretches to six years if you underreport income by more than 25 percent, and there is no time limit at all if a return is fraudulent or never filed. Because of that, most tax records should be kept for at least seven years to be safe. A handful of documents, such as the tax returns themselves and business formation papers, are worth keeping permanently.
How long to keep your records
For individuals and families
For businesses
Storing and disposing of records
- Digital records count. The IRS accepts electronic copies, so scanning and backing up documents is a great way to cut clutter.
- Keep more than one backup of your digital files, ideally in separate places.
- Shred any paper with personal or financial information before you throw it away.
- When in doubt, keep it longer, or simply ask us.
This guide offers general retention guidelines only. Your situation may call for keeping records longer, and rules can change, so please confirm with your CPA before discarding anything important.
Record retention FAQs
Keep the tax returns themselves permanently. Keep the supporting documents, such as W-2s, 1099s, and receipts, for at least seven years.
Seven years is a safe rule if they support tax deductions or business activity. If a statement has nothing to do with taxes, about a year is usually fine.
Yes. The IRS accepts electronic records, so scanning and securely backing up your documents is a great way to reduce paper. Just keep reliable backups.
Filed tax returns, year-end financial statements, records of nondeductible IRA contributions, and business formation documents are all worth keeping permanently.
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Not sure what to keep?
Our Mesa CPA team is happy to help you sort out what to save and what to shred. Reach out for a free consultation.