How long to keep tax documents: a schedule by record type

The IRS ties retention to one window. The period of limitations is the time during which you can amend a return or the IRS can assess more tax for that year (IRS, How long should I keep records?). Once that window closes for a year, the records behind that year have done their job for federal tax.

The base window is 3 years from the date you filed the original return (IRS, How long should I keep records?). The clock starts on the filing date, not at the end of the year. A return filed before the April deadline counts as filed on the due date (IRS Publication 17). So a return filed in February starts its clock on the April due date.

Longer periods replace the base window in a few cases. The table below lists them, and the checklist at the end turns them into one line per document.

Keep a copy of every return you file. The IRS says copies help you prepare future returns, and that you need them to amend or in an audit (IRS Publication 17). A filed return is small, and it is the first thing a lender or a new preparer asks for, so keep it for good.

The forms that fed the return follow the period for that year. That covers Forms W-2, 1099-NEC, 1099-INT, 1099-DIV, 1099-R and SSA-1099, and the W-2 from each job. Keep them with the return they support, in one folder per tax year.

If an old return is missing, you can still get its figures. A tax return transcript is an IRS summary of the return as filed, and you can get one online or by mail (IRS, Get transcript). It is not a full copy, so it does not replace your own file.

Some records support a number you will use years later. The IRS says to keep records relating to property until the period of limitations expires for the year you dispose of the property (IRS, How long should I keep records?). You need them to figure depreciation and the gain or loss when you sell (IRS, How long should I keep records?).

In practice, basis records are the papers that prove what you paid for an asset and what you added to it. For a home, that means the closing statement and the invoices for improvements. For shares, it means the purchase confirmation or the broker’s cost basis statement.

A gift carries the giver’s history. To figure the basis of property you received as a gift, you need the donor’s adjusted basis just before the gift, its fair market value on that day and any gift tax paid (IRS Publication 551, Basis of Assets). Ask the giver for their purchase papers when the gift is made, not when you sell.

A swap adds a layer. If you received property in a nontaxable exchange, keep the records on the old property and the new one until the limitation period ends for the year you sell the new one (IRS, How long should I keep records?).

• Home: the closing disclosure or settlement statement, the deed, and every improvement invoice, while you own it and through the period after the sale year.
• Investments: trade confirmations, Form 1099-B and dividend reinvestment records, until the return that reports the sale is out of its period.
• Rental or business assets: the Form 4562 depreciation schedule and purchase papers, until the year of sale is closed.
• IRA basis: Form 8606 and the Forms 5498 and returns behind it, until all distributions are made (Form 8606 instructions).
• Carryovers, such as a capital loss or a charitable deduction you could not use yet: until the last year that uses them is out of its period.

If you also pay a nanny or run a small business, payroll adds its own floor. The IRS sets employment tax records at a minimum of 4 years, counted from the later of the tax’s due date or its payment (IRS, How long should I keep records?). The business records schedule lists the employer forms and the wage-hour periods that sit beside it.

Other parties can ask for more. The IRS notes that insurers or creditors may want records kept longer than it does, so check before you shred (IRS, How long should I keep records?). The IRS Publication 4557 guide covers how a firm should protect the files it keeps.

A refund claim keeps a year alive. The window is the later of 3 years from the original filing or 2 years from the payment, and an early return is treated as filed on the April deadline (IRS, File an amended return). The receipts behind the change must still exist on the day you file it, so do not shred a year you may still amend; the amended return checklist lists what that file needs.

An exam works the same way. The IRS can ask for the documents behind any line of an open year. If a client throws out receipts after one year, the deduction can be lost even when it was real.

Scans are fine when they are clear and complete. Keep each scan with the date it was made and the tax year it belongs to. A folder per year, with the return on top, makes the shredding check quick.

Before you shred a year, run through the questions below. They come from the periods above, plus state rules that can run longer.

1. Is the year past its base period from the filing date, with no longer period in play?
2. Did you claim a refund for that year, and is the claim window still open?
3. Does any record prove the basis of something you still own, such as a home or shares?
4. Does the year hold a carryover, Form 8606 basis or depreciation you still use?
5. Does your state keep returns open longer than the IRS, or does a lender or insurer want copies?
6. If every answer is no, shred the supporting papers and keep the filed return.

• IRS, How long should I keep records?: The 3, 6 and 7-year periods, the refund-claim rule, indefinite retention, 4 years for employment tax records, property records kept until the year of disposal is closed, and non-tax reasons to keep records longer.
• IRS Publication 17: Keep copies of filed returns, and a return filed before the due date is considered filed on the due date.
• IRS, File an amended return: A refund claim is generally filed within 3 years after filing or 2 years after paying the tax, counted from the April deadline for an early return.
• Form 8606 instructions: Keep Forms 8606, 5498 and the related returns until all distributions from your IRAs are made.
• IRS, IRS audits: The IRS generally audits returns filed within the last three years, may add years for a substantial error, and usually goes back no more than six.
• IRS Publication 551, Basis of Assets: The basis of gifted property depends on the donor’s adjusted basis, its fair market value when given and any gift tax paid.
• IRS, Get transcript: A tax return or tax account transcript can be obtained online or delivered by mail.