December 13, 2006

3 years, 7 years, Forever? How long do you hold on to your tax records?

This is one of the most common questions I receive. How long do you hold your records? I would suggest always keeping your tax records in a secure location for as long as possible. But this is not a perfect world and space comes at a premium. So, for the most part you just have to hold on to your records for 3 years. There are a couple exceptions to this rule though.

  • First if you didn't report more then 25% of income that you should have reported you need to hold on to your records for 6 years.
  • If you straight up lied on your taxes or did not file your return(shame on you!) you should hold on to that years records forever.
  • If you have employees keep all records pertaining to them for at least 4 years.
That is the majority of all the cases. There are a couple of special cases that won't apply to the majority of people. If you want to see more about this then check out the IRS website on this information here.

1 comment: