What Is the Retention on Personal Tax Records?


Quick Answer

In most cases, a taxpayer should keep his personal tax records for three years after filing a return, according to the IRS. A taxpayer should keep a copy of his filed tax returns in case he needs assistance with filing future tax returns or an amended return.

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Full Answer

If a taxpayer files a claim for a loss resulting from a bad debt deduction or worthless security, he should keep his tax records for seven years, notes the IRS. If an unreported income is more than a quarter of the taxpayer's gross income not reported on a return, he should keep his tax records for six years if the income should have been reported. Tax records should be kept indefinitely if the taxpayer files a fraudulent return or if he fails to file a return at all.

The reason a taxpayer should keep his records for three years is because that's how long the IRS has to audit him, states USA Today. One exception to this rule is that the IRS has six years to audit a taxpayer who underreports his gross income by at least 25 percent. In addition to tax records, taxpayers should also hold onto 1099s, W-2s, charity acknowledgements and additional supporting documents. Any notes made while talking with a tax preparer about tax strategies should also be kept in case the taxpayer is ever audited.

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