With tax season behind you, it’s natural to wonder how to keep tax records and what you can safely toss. Different documents have different retention rules. Keeping records too long — or not long enough — can create unnecessary risk or clutter.

Understanding what to retain, and for how long, helps you stay organized and prepared if questions arise.

 

Federal Tax Records

Knowing how to keep tax records properly starts with understanding IRS timelines. The IRS typically has three years to audit your return. This period begins on the later of your filing date or the return’s due date.

As a general rule, keep federal tax records for at least three years from that date.

Keep documents that support items on your tax return until that period expires. This includes canceled checks, receipts for alimony, charitable contributions, mortgage interest, and retirement contributions.

You can also file an amended return during this time if you missed a deduction, overlooked a credit, or misreported income.

 

When You Can Discard Tax Records

You can generally discard records once the statute of limitations expires.

For example, if you filed your 2022 return in April 2023, keep those records until at least April 2026.

 

Exceptions to the Three-Year Rule

An audit is still possible after three years in certain situations.

If the IRS believes you understated income by 25% or more, the audit window extends to six years. If fraud is suspected — or if you never filed — there is no time limit.

Because of these exceptions, many advisors recommend keeping copies of filed tax returns indefinitely. At a minimum, keep them for six years.

Keep records that affect multiple years — such as charitable carryovers or disaster losses — until the statute of limitations expires for the final year they’re used.

In some cases, you may have more time to amend a return. For example, you have up to seven years to claim deductions for bad debts or worthless securities. Don’t discard records that could support those claims.

 

State Tax Records

These guidelines apply to federal taxes. State rules may differ.

Ask your tax advisor how long to keep records for state purposes.

If the IRS audits you, states often have up to one year after the federal audit ends to review the same return. Keep all related records until that period passes.

 

Bills and Receipts

You can usually shred routine bills — like phone or credit card statements — once the payment clears or at year-end.

If a bill supports a tax deduction, follow the federal record retention guidelines.

For large purchases — such as jewelry, furniture, or a computer — keep receipts for as long as you own the item. You may need them for insurance claims.

 

Real Estate Records

Keep real estate records for as long as you own the property, plus three years after you sell it.

During ownership, keep purchase documents, improvement receipts, insurance claims, and refinancing records.

These documents help prove your adjusted basis. You’ll need that to calculate any taxable gain when you sell. They can also support rental or home office deductions.

 

Investment Account Statements

Keep detailed records of investment activity, including purchase and sale dates, quantities, prices, and reinvested dividends.

Also keep records of related expenses, such as brokerage fees.

Hold these records for as long as you own the investment, plus until the statute of limitations expires for the related tax return.

The IRS also requires you to keep Forms 8606, 5498, and 1099-R until all IRA funds are withdrawn.

For Roth IRAs, keep all contribution and withdrawal records. These are especially important if questions arise later.

If you close an account, follow the same retention rules. Keep all documentation until the statute of limitations expires.

 

Save It or Shred It?

It’s tempting to clear out old files, but a thoughtful system for how you keep tax records can reduce risk and improve organization and can protect you or your business.

With the right documents on hand, you’ll be ready to respond if the IRS has questions.

That said, you don’t need to keep everything forever. Old records take up space and can create risk if not properly disposed of.

If you’re unsure what to keep or discard, your tax advisor can help you create a system that works for you.

If you’re preparing for a business transition, explore our sell-side advisory services to understand how proper documentation can support valuation and due diligence.