Now that the tax filing season has come and gone, you may be wondering how long to keep records and what records to keep. Keeping necessary records after you file your taxes is a good idea, as they will help you with documentation and substantiation if the IRS selects your return for an audit.
“Normally, tax records should be kept for three years,” said Clay Sanford, an IRS spokesman in Dallas. “Some documents—such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property—should be kept longer.”
In most cases, the IRS does not require you to keep records in any particular manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
“When records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes,” Sanford added. “For example, your insurance company or creditors may require you to keep them longer than the IRS does.”
For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on the IRS website at www.irs.gov or by calling 1-800-TAX-FORM.