How Long to Keep Tax Returns: 7 Questions to Consider

It’s always a relief once taxes are filed for the year. But what do you do with all the paperwork afterward? How long should you keep your tax returns and records?

For most people, three years is a good time frame, but it could be much longer in many situations. Plus, it can often be a good idea to hold onto records longer than the required time for other non-tax reasons.

To measure the period of limitations, it starts at the time when the tax return was filed. Returns filed early are treated as filed on the due date. So if your taxes were due on April 15th, but you filed in February, the clock still starts on April 15th.

What is the Period of Limitations?

How Long to Keep Tax Returns (according to the IRS)

For the actual tax return itself, the IRS advises keeping them forever. I would 100% agree with that. Especially in the digital age, where everything can be saved on a hard drive or backed up in the cloud, there’s no reason to toss your actual tax returns.

A business owner probably should plan to keep at least six years worth of 1099s and other records of business income and expenses to be safe.

How Long Should I Keep Tax Returns as a Small Business Owner?

What if I Have Claimed Investment Losses or Bad Debt Write-Offs?

You get to claim this loss to offset your income (in most cases) on your tax return. However, per the IRS, filing a claim of loss for bad debt or a worthless investment triggers a seven-year period of limitations.

In most cases, following the IRS guidelines for how long to keep federal tax returns will keep you in the clear for state tax records as well. However, be sure to check your individual state requirements.

How Long to Keep State Tax Return

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