Suggested Holding Periods for Tax Records
1. Retaining Copies of Form 1040 & Supporting Documents
It is strongly recommended that taxpayers keep copies of Form 1040 and all supporting schedules indefinitely.
2. IRS Record Retention Requirements
The IRS requires that tax records be kept as long as they remain relevant to Federal Tax law. Generally, this means:
- 4 years from the date the return is filed OR
- 3 years from the tax payment date OR
- 7 years if income was underreported by more than 25%
(Whichever is later applies.)
3. Financial Records & Supporting Documents
Keep ALL bank statements, checks, receipts, and other financial records for at least 4 years, especially those that support figures reported on a tax return.
4. Records to Hold Indefinitely
Some documents should never be discarded, including:
- Records of purchase, sale, and major improvements for your current and past primary residences.
- IRA records, investment purchases/sales, and all Form 1040 tax returns filed each year.
Maintaining organized tax records ensures compliance, supports accurate tax filings, and helps in case of IRS audits or inquiries.
For more official IRS guidelines, visit www.irs.gov.