How long do I need to keep my tax records?

The IRS generally recommends keeping copies of tax returns and supporting documents at least three years.  However, some documents should be kept up to seven years in case a taxpayer needs to file an amended return, or if questions arise.  Further, tax records should also be kept for at least seven years if a return claims a loss from worthless securities or a bad debt deduction.

Employment tax records should be kept at least four years after the date that the tax becomes due or paid, whichever is later.

Copies of previously filed tax returns are helpful in preparing current-year tax returns and making computations if a return needs to be amended.  Further, tax records should be kept safe and secure regardless of whether they are stored on paper or kept electronically.  In addition, tax documents not properly disposed of can land in the hands of criminals and lead to identity theft.  Once past their useful date, records should be disposed of properly.

*Kiplinger Tax Letter