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Make sure you haven’t lost or discarded your recent tax records. Even after completing the tax season, storing these documents safely for the coming years is important.
It's essential to keep your tax returns forever, and an electronic copy works just fine. This isn't necessarily for the IRS, but some creditors and financial institutions may request these documents much later, even after the IRS has stopped needing them.
The recommended retention period for supporting documents varies. The IRS suggests keeping them for three years (with some exceptions), as it generally has to initiate an audit within this timeframe. However, some tax professionals advise keeping them for up to seven years for extra security.
Here are the documents you should keep for at least three years:
W-2 forms
1099 forms reporting income
1099 forms reporting capital gains, dividends, or interest
Form 1098 (for mortgage interest deduction)
Receipts for charitable donations
Any other records for itemized deductions (alimony, mileage logs, expenses, etc.)
How you store these documents is completely up to you. Storing them electronically might be the most convenient option for many, and the IRS doesn’t dictate the storage method.
Here are other types of documents you’ll want to keep indefinitely:
Form 8606, showing you've already paid taxes on nondeductible IRA contributions
Form 5498, documenting IRA contributions
Any paperwork related to the amortization, purchase, or sale of property (including insurance forms, closing statements, and property tax assessments)
Documents showing a stock loss write-off
If you’ve reported less than 75% of your income, the IRS recommends keeping your records for six years. Additionally, if you fail to file or submit a fraudulent return, the IRS advises that you retain your returns indefinitely, as there is no statute of limitations for audits in cases of unlawful activity.
