7 years
WHAT TO KEEP. The most important documents to hang on to are your annual tax returns. You should keep the actual returns forever, but you can get rid of the supporting documents after three years. That's how long the IRS has to initiate an audit. Once the time elapses, toss the records -- and shred any that reveal your Social Security number or other personal information. Another reason to keep these papers: If you sell your house at a hefty profit (more than $500,000 for couples filing a joint return or $250,000 for single filers), certain expenses can be used to lower your tax bill. After you sell the house, keep the documents fo Tax returns and all the supporting documentation must be kept at least seven years. The IRS can audit your return for up to three years from your filing date. However, the three-year limit only applies to good-faith errors. Sadly, the IRS has ruled bank or credit card records to be insufficient documentation. As a result, just keep your statements long enough to reconcile your account. If the IRS suspects you underreported your gross income by 25% or more, they have up to six years to challenge your return. And because you may file for an extension at the October 15 deadline, you must keep your records for Records for tax deductions taken. Length of time to keep, and why: Seven years. 1  The IRS has three years from your filing date to audit your return if it suspects good-faith errors. 2  The three-year deadline also applies if you discover a mistake in your return and decide to file an amended return to claim a refund. Credit card receipts and statements. Length of time to keep, and why: From 45 days to seven years. 1  Keep your original receipts until you get your monthly statement; shred the receipts if the two match up. 1 Bank Statements (Unless needed for tax purposes and then you need to keep for 3 years). 2  Quarterly Investment Statements (Hold on to until you get your annual statement). 3  Income Tax Returns (Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. 1 Income Tax Returns (Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. 2  If you omit 25% of your gross income that goes up to 6 years and if you don't file a tax return at all, there is no statute of limitations.). I decided to check the IRS guidelines first. The gist of their guidelines is that you only need to store records for as long as the period of limitations applies. For example, that means that if there is still time for you to amend one of your tax filings, you should keep the records for that tax year. The period of limitations is the period of time in which you can amend your tax return to claim a tax credit or tax refund or that the IRS can assess additional tax.  1 Typically, the IRS can come after your business for failing to report income for up to 6 years after your filing if the amount is greater than 25% of your business’s gross income. 2  If you filed for a deduction for a bad debt or worthless security, the IRS suggests you keep your supporting tax records for 7 years. 1 If you filed for a deduction for a bad debt or worthless security, the IRS suggests you keep your supporting tax records for 7 years. 2  Under these circumstances, you may generally wish to retain your supportive records for at least 7 years. 3  Employment Tax Records. Often swamped with paperwork, many entrepreneurs wonder how long you should keep business records. The answer depends a great deal upon whom you ask and what the record pertains to in your business. The IRS sets some basic record retention standards for tax records. 1 If you filed for a deduction for a bad debt or worthless security, the IRS suggests you keep your supporting tax records for 7 years. 2  Under these circumstances, you may generally wish to retain your supportive records for at least 7 years. 3  Employment Tax Records. The IRS defines several periods of limitations that define how long you need to keep the tax return. If you did not report income your parent received that you should have, and it is more than 25 percent of the gross income shown on the return, the IRS can look back 6 years.  1 Income Tax Returns (Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. 2  If you omit 25% of your gross income that goes up to 6 years and if you don't file a tax return at all, there is no statute of limitations.). 
http://www.kiplinger.com/article/credit/T065-C000-S002-paper-records-what-to-toss-what-to-keep.html http://www.emarotta.com/how-long-should-i-keep-financial-and-tax-records/ http://www.bankrate.com/finance/personal-finance/how-long-to-keep-financial-records.aspx http://apps.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=84&SnavID=20&TnavID&AreasofExpertiseID=17 http://blog.turbotax.intuit.com/tax-planning-2/how-long-do-i-need-to-keep-my-tax-records-11641/ http://www.nolo.com/legal-encyclopedia/how-long-should-you-keep-business-records.html http://www.nolo.com/legal-encyclopedia/how-long-should-you-keep-business-records.html http://finance.zacks.com/long-save-deceased-parents-tax-returns-7994.html http://www.suzeorman.com/resource-center/record-keeping
how long to keep financial records irs