FAQ: How Long Should The Average Person Keep Tax Records?
“In general, you should keep your tax records for at least three years after the date in which you filed, according to the IRS statute of limitations,” says Lisa Greene-Lewis, CPA and tax expert with TurboTax.
- 1 How many years worth of tax records should I keep?
- 2 How long should you keep your tax records in case of an audit?
- 3 Should you shred old tax returns?
- 4 How do I get rid of old tax returns?
- 5 When should old tax records be destroyed?
- 6 Can the IRS go back more than 10 years?
- 7 How long should you keep tax returns for a business?
- 8 How many years of bank statements should you keep?
- 9 What papers to save and what to throw away?
- 10 How can I get rid of old bank statements without a shredder?
How many years worth of tax records should I keep?
Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
How long should you keep your tax records in case of an audit?
The IRS recommends keeping returns and other tax documents for three years (or two years from when you paid the tax, whichever is later.) The IRS has a statute of limitations on conducting audits and it is limited to three years.
Should you shred old tax returns?
With that timeframe, California residents should keep their state tax records for at least four years. What Should I Do with My Old Tax Returns? Once you have scanned your tax documents, make sure to dispose of them in a secure manner. At the very least, shred them before throwing them in the trash.
How do I get rid of old tax returns?
The most common way to destroy sensitive documents is to shred them. Many stores offer paper shredding at a cost to you. Some of those businesses include The UPS Store, FedEx, Staples, and Office Depot. Sometimes, your financial institution will shred them.
When should old tax records be destroyed?
As a rule, keep your tax records and supporting documentation until the statute of limitations runs for filing returns or filing for refund. For most taxpayers, that means that you’ll want to keep those records for three years following the date of filing or the due date of your tax return, whichever is later.
Can the IRS go back more than 10 years?
As a general rule, there is a ten year statute of limitations on IRS collections. This means that the IRS can attempt to collect your unpaid taxes for up to ten years from the date they were assessed. Subject to some important exceptions, once the ten years are up, the IRS has to stop its collection efforts.
How long should you keep tax returns for a business?
Keep business income tax returns and supporting documents for at least seven years from the tax year of the return. The IRS can audit your return and you can amend your return to claim additional credits for a period that varies from three to seven years from the date you first filed.
How many years of bank statements should you keep?
Most bank statements should be kept accessible in hard copy or electronic form for one year, after which they can be shredded. Anything tax-related such as proof of charitable donations should be kept for at least three years.
What papers to save and what to throw away?
What Documents Can I Throw Away—and When?
- Tax Returns. Old tax documents are probably the number one category of documents we’re asked about.
- Bank Statements.
- Explanation of Benefits (EOB) Forms.
- Medical Bills.
- Utility Bills.
- Paycheck Stubs.
- Credit Card Statements.
- Wills and Estate Planning Documents.
How can I get rid of old bank statements without a shredder?
How to Dispose of Documents Without a Shredder
- 1 – Shred Them by Hand.
- 2 – Burn Them.
- 3 – Add Them to Your Compost.
- 4 – Use Multi-Cut Scissors.
- 5 – Soak Them in Water.
- 6 – Wait for a Local Shred Day.
- 7 – Use a Local Paper Shredding Service.