We're into tax season now, and you're probably getting your taxes ready to send into the IRS. You may wonder how long you should hang onto those tax-related papers and documents you've accumulated over the years.
What to keep... what to toss out. It's a dilemma for many of us when it comes to our taxes. Here's what the IRS says.
According to the IRS, you "must keep your records for as long as they're important for the federal tax law." What does that mean?
- In most cases, that's three years. But there are some exceptions where you'll want to hang onto records longer.
- If you fail to report income, the IRS can go back up to six years.
- And if you didn't file a return, or filed a fraudulent one, the IRS can come after you at any time. If you're ever accused of fraud, you'll want to have documents that support your innocence.
What about copies of your tax returns themselves? The IRS says it's a good idea to keep those as part of your permanent files. They may be helpful in amending filed returns or preparing future ones.
Before you toss any tax-related documents, it's a good idea to invest in a shredder to guard against identity theft.
Click here for more information on how long to keep tax records.
