How Long to Keep Tax Records? Step-by-step guideline

The IRS generally recommends keeping tax records for three years, but in some situations you may need to hold on to them for 6 six years, seven years, or even indefinitely. In this guide we explain the exact timelines, the types of documents you should keep, and the reasons why keeping records longer can be helpful. You will also find practical tips to stay organized so you can keep what matters and safely let go of the rest.

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What Tax Records Should You Keep

Before looking at how long to store them, it helps to know which tax records are worth keeping. The IRS advises holding on to anything that proves your income, deductions, or credits on a return. In everyday terms, this includes:

• Tax returns

• Income forms

• Expense records

• Home and property papers

• Investments and retirement accounts

A simple way to remember this is that any paper or file that helps explain something on your tax return is worth keeping.

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Basic Rule to Keep Tax Records for Three Years

Most taxpayers only need to hold on to their records for three years. The IRS usually has that amount of time to review a return, and you also have the same window to make changes if you forgot a deduction or credit.

For example, if you filed your 2024 return on April 15, 2025, you should plan to keep those documents until at least April 15, 2028. After that date, the IRS will normally no longer review that year, and you can clear out the files unless one of the special situations explained later applies.

How Long to Keep Tax Records

The three-year rule covers most people, but certain situations call for keeping your records longer. The IRS explains it this way:

• Keep records for six years if you did not report income that should have been reported and the amount is more than 25 percent of the total income shown on your return.

• Keep records for seven years if you claimed a loss from worthless securities or a bad debt deduction.

• Keep records indefinitely if you did not file a return.

• Keep records indefinitely if you filed a return that was fraudulent.

• Keep records for three years after filing or two years after paying the tax, whichever is later, if you file a claim for credit or refund.

• Keep employment tax records for at least four years after the tax is due or paid, whichever is later.

These rules may look strict, but the idea is simple. The more unusual or complex your situation, the longer you should hold on to your paperwork.

Property and Investment Records May Need Extra Time

Property and investments do not always follow the three-year rule. These records often need to be kept much longer because you may still need them when you decide to sell or withdraw.

Homeownership

Keep documents that show the purchase price of your home, mortgage papers, and receipts for renovations or upgrades. Hold on to them until after you sell the home and then keep them for at least three more years. These papers help you figure out if you owe tax on any profit from the sale.

Rental Properties

If you own a rental property, keep all records of improvements and depreciation. These are needed to calculate taxes when the property is sold.

Stocks and Bonds

Keep brokerage statements and proof of trades until the asset is sold and reported on your return, then keep them for three more years.

Retirement Accounts

For IRAs, 401ks, or other retirement plans, hold on to records until at least three years after the account is completely distributed.

Non-Tax Reasons to Save Your Records

Even after the IRS period ends, there are plenty of situations where having old tax returns makes life much easier.

Mortgages and Loans

If you apply for a mortgage or a big personal loan, lenders often want to see your last two or three years of tax returns. These papers help them check that your income is steady and reliable.

Social Security

Your W2s are more than just job slips. They show how much you earned over your lifetime, and that information directly affects the benefits you’ll receive when you retire. Losing them could mean mistakes in your records later.

Financial Aid

Requests for tax documents are a common occurrence for students applying for financial aid. Recent tax returns may be required as evidence of family income for need-based programs, grants, and scholarships.

Immigration or Visas

Old tax returns can serve as evidence of residency and income when completing immigration documents or visa applications. These documents can facilitate the process, particularly in lengthy or difficult cases.

Personal Planning

You can see how your money situation has changed by looking at past returns. People often use them to plan for retirement, make a budget, or just keep an eye on their money.

How Long to Keep State Tax Records

Your state might have its own rules for looking at past returns, but the IRS rules only apply to federal taxes. It's important to know what rules apply in your state because they often have a longer history than the IRS.

• In California and Arizona, the review period is usually four years.

• In Montana, the period can extend to five years.

• Some states follow the federal three-year rule, but not all.

• Florida has no state income tax, which means you only need to follow the federal rules if you live there.

The safest approach is to keep your records for whichever period is longer your state’s rule or the IRS rule. A quick check on your state tax agency’s website will give you the exact answer.

How to Dispose of Old Tax Documents Safely

Make sure to dispose of old tax records safely when the time comes. Throwing these documents in the trash puts you at risk of identity theft because they frequently contain account information and Social Security numbers. Utilizing a cross-cut shredder or participating in community shredding events offered by numerous banks and office supply stores are the best options. For your own reference, you might want to scan a digital copy first and keep it on a secure drive or in the cloud. 

How We Help You Stay Organized with Tax Records

Keeping tax records in order should not be a headache. For more than 23 years, our team has been helping people and businesses stay on top of their paperwork and taxes.

We guide you on what documents to keep and what you can safely throw away. We also provide secure digital options so you can store your records without piles of paper. If the IRS or your state ever asks for information, everything is ready and in place. You do not have to worry about last-minute searching.

Every client is different, and we make sure our advice fits your situation. Whether you own a home, run a business, work freelance, or are preparing for retirement, you get support that matches your needs.

Book a free consultation today and let us help you stay organized and stress free.

Conclusion

Not everyone has the same amount of time to maintain tax records. Three years is usually sufficient, but in some circumstances like real estate sales, investments, or lost income—you might want to hold onto them for longer. In addition, old records may be helpful for purposes other than taxes, such as loans, Social Security, or other necessities.

Keeping what is important and safely discarding what you no longer need is the best course of action. You can proceed with confidence knowing that you are safe in the event that someone requests proof in the future when your documents and digital files are well-organized and safe.

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