How Long Do I Need To Save My Tax Paperwork And Prior Tax Returns?

To cover all of your bases, keep your tax records for 7 years. The minimum requirement is 3 years for most taxpayers, although several exceptions to that rule exist.

Period of Limitations that apply to income tax returns – from

  1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
  2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
  3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
  4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
  5. Keep records indefinitely if you do not file a return.
  6. Keep records indefinitely if you file a fraudulent return.
  7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

By keeping your information for the maximum recommended term of 7 years, you help assure that you are covered under any circumstance.  The paperwork should not take up that much room to matter.  If it does take up a lot of room, you are more likely to have a situation that requires you saving the documents for the longer 7 year period anyway.