The IRS publishes guidelines on how long to keep accounting records. These are records such as income, deductions, or credits taken on a tax return. The IRS defines a period of time ('period of limitations') for holding records as the time for which one can amend a return or the IRS can impose more taxes on the taxpayer.
The time periods for income tax returns include:
- 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 a credit or refund after you file your return.
- 7 years if you file a claim for a loss from a worthless securities or bad debt deduction.
- 6 years if you did not report income you should have reported, and it is more than 25% of the gross income shown on a return.
- Keep records indefinitely if you did not file a return.
- Keep records indefinitely if you filed a fraudulent return.
There are other things to consider based on the nature of the records:
- Property records - keep until year property is disposed.
- Healthcare insurance - if you claimed the premium tax credit, keep records for as long as you received advanced credit payments through the Health Insurance Marketplace and premiums paid.
- Business records - if you have employees, employment tax records should be kept for 4 years after the tax becomes due or is paid, whichever is later.
