How long should one keep tax documents?
- November 5, 2021
- David Greene
- Comments Off on How long should one keep tax documents?
The answer is not as simple as you might think. If you have the room, it would be wise to keep those records for at least ten years. In these days it is easy to scan paper documents and store them electronically, which greatly reduces the storage space. Of course, you should have a backup of the digital data also. In general, IRS guidelines indicate that the statute of limitations for audits is three years, so the records should be kept at least that long. This only applies if a return was actually filed. If you claimed losses from bad debts or securities, the records should be kept seven years. There is no statute of limitations if the return is not filed or is deemed fraudulent. Businesses should keep employment tax records for at least four years. Special rules apply for the sale of real property that are too detailed to discuss here.