Once you file your taxes, you should plan to keep your tax returns for a minimum of three years See this from the date you filed your original return. But there are situations where you should keep your tax returns even longer.
Three years
If you’re an employee who receives a W-2 and your taxes aren’t complicated, your timing likely can be short.
“Taxpayers should keep tax records for at least three years. The IRS has a three-year statute of limitations to audit your return and assess additional tax,” says Mark Weiskind, founding partner and senior wealth manager at Fairway Wealth Management. Plus, “taxpayers have three years from the date a return is filed to claim a refund due.”
Six years
That three-year rule doesn’t apply to everyone, though.
The statute of limitations is extended to six years if your adjusted gross income is underreported by more than 25 percent, Weiskind says.
And if you file a fraudulent return, the statute of limitations doesn’t ever expire.
Seven or more years
If you file a claim for a loss from worthless securities or bad debt deduction, you need to keep the records for 7 years, according to the IRS.
The IRS’s statute of limitations rises to 10 years from the date a return is processed to collect on a tax balance due, Weiskind says. However, both the taxpayer and the IRS can extend the 10-year period, for instance if there is litigation or an offer in compromise.
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