You should keep your tax records for at least three years from the date you file your tax return. The Internal Revenue Service (“IRS”) generally has three years to assess additional tax liabilities and you generally have three years to amend a prior tax return. However, since under some circumstances the IRS has up to six years to audit your returns, you should consider keeping your records for six years from the date you filed your tax return.
What to keep longer
You’ll need to hang on to certain records beyond the statute of limitations:
- Keep tax returns themselves forever, so you can prove to the IRS that you actually filed. (There’s no statute of limitations for an audit if you didn’t file a return.)
- You should maintain records of your non-deductible individual retirement account (“IRA”) contributions, until you have distributed all of the money from the IRA accounts. The records will allow you to prove the amount of non-taxable distributions from your IRA.
- For W-2 forms, consider holding them until you begin receiving Social Security benefits. Why? In case a question arises regarding your work record or earnings for a particular year.
- For records related to real estate or investments, keep documents as long as you own the asset, plus three years after you sell it and report the sale on your tax return.
Just a starting point
This is only a sampling of retention guidelines for tax-related documents. If you have questions about other documents, please contact me at firstname.lastname@example.org or your Berdon advisor.
Hal Zemel, a Tax Principal at Berdon LLP, New York Accountants, has more than 20 years in public accounting and advises businesses in the real estate, service, and manufacturing sectors.