How long to keep personal records?
Short answer
You must keep your tax returns three years.
According to the IRS, “You must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitation for that tax return runs out”.
So that being said, you need to keep your tax returns and supporting documents for three years. But, if the IRS believes there is fraud or income is underreported by 25% or more, they can go back six years in an audit. Below are some general guidelines.
Records to keep for 3 years
- Bank Statements
- Brokerage Statements
- Retirement statements
- Paychecks stubs
- Canceled checks (especially tax payments)
Records to keep for 7 years
- 401k /Keogh Statements
- Annuity Year End Statements
- Forms 1099’s
- W-2’s
- Loan Records/ Forms 1098
- Major Purchase receipts
- Investment/ Sales of Stocks & Bonds
Records to keep Permanently
- Alimony, Custody, or Prenuptial Agreements
- Birth and Death Certificates
- CD Statements
- Detailed lists of Financial Assets
- House records (purchase, major improvements)
- IRA Records
- Military Records
Note: This is only a guide. Consult with your tax professional/ attorney.
Sources
https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records
Disclaimer
No rendering of Advice
The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax or financial advice from a professional.
