How Long to Keep Tax Records

When it comes to keeping tax records, a lot of people are unsure of the proper amount of time to hold particular information before disgarding it. Some people will keep all records permanently, but this can be more of a hassle than anything else...and things do tend to get lost in the clutter. So how long should you hold onto your records? Here is a list of seven different situations and the length of time you should hold onto your records for.

1. You owe additional tax and situations (2), (3), and (4) below, do not apply to you; keep records for 3 years.

2. You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years.

3. You file a fraudulent return; keep records indefinitely.

4. You do not file a return; keep records indefinitely.

5. You file a claim for credit or refund after you file your return; keep records for 3 years from the date you fild your originial return or 2 years from the date you paid the tax, whichever is later.

6. You fild a claim fo ra loss from worthless securities or bad debt deduction; keep records for 7 years.

7. Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.