Good recordkeeping can cut your taxes and make your financial life easier.
How long to keep records is a combination of judgment and state and federal
statutes of limitations. Since federal tax returns can generally be audited for
up to three years after filing and up to six years if the IRS suspects underreported
income, it’s wise to keep tax records at least seven years after a return
is filed. Requirements for records kept electronically are the same as for paper
records.
Generally, follow these recommended retention periods for various documents:
Tax
returns (uncomplicated) |
7 years |
| Tax
returns (all others) |
Permanent |
W-2s |
7 years |
1099s |
7 years |
Cancelled
or substitute checks supporting tax deductions |
7 years |
Bank
deposit slips |
7 years |
Bank
statements |
7 years |
Charitable
contribution documentation |
7 years |
Credit
card statements |
7 years |
Receipts,
diaries, logs pertaining to tax returns |
7 years |
Investment
purchase and sales slips |
Ownership period + 7 years |
Dividend
reinvestment records |
Ownership period + 7 years |
Year-end
brokerage statements |
Ownership period + 7 years |
Mutual
fund annual statements |
Ownership period + 7 years |
Investment
property purchase documents |
Ownership period + 7 years |
Home
purchase documents |
Ownership period + 7 years |
Home
improvement receipts and cancelled checks |
Ownership period + 7 years |
Home
repair receipts and cancelled checks |
Warranty period for item |
Retirement
plan annual reports |
Permanent |
IRA
annual reports |
Permanent |
IRA
nondeductible contributions (Form 8606) |
Permanent |
Insurance
policies |
Life of policy + 3 years
(Check with your agent. Liability for prior years can vary.) |
Divorce
documents |
Permanent |
Loans |
Term of loan + 7 years |
Estate
planning documents |
Permanent |
