IRS Record Retention Guidelines

 

The IRS does not require everyone to keep records forever, but you must keep tax and financial records long enough to support the items reported on your return.

 

General Guidelines:

 

At least 3 years

Keep copies of your tax returns and supporting documents (W-2s, 1099s, receipts, bank statements, etc.) for a minimum of three (3) years from the date you filed your return or the due date, whichever is later.

 

Up to 7 years for certain items

If you file a claim for a loss from worthless securities or bad debt, keep those records for seven (7) years.

 

At least 6 years if income was underreported

If you did not report income that should have been reported and it is more than 25% of the gross income shown on your return, the IRS can generally audit up to six (6) years. Keep those records at least that long.

 

Keep property records as long as you own it for real estate, vehicles, or other major assets, keep purchase records, improvement receipts, and related documents for as long as you own the property and for a period after it is sold (to support gain/loss calculations).

 

Business records

Businesses should keep tax and financial records for at least 7 years, and payroll tax records for at least 4 years after the date the tax becomes due or is paid (whichever is later).

 

Important: These are general IRS guidelines. Specific situations, state requirements, and legal or lending needs may require you to keep records longer. Clients should consult with us directly to determine the appropriate retention period for their circumstances.