How long should you keep Tax Records?
- The IRS generally recommends keeping copies of tax returns and supporting documents at least three years.
- Employment tax records should be kept at least four years after the date that the tax becomes due or paid, whichever is later.
- Tax records should be kept at least seven years if a return claims a loss from worthless securities or a bad debt deduction.
- Copies of previously-filed tax returns are helpful in preparing current-year tax returns and making computations if a return needs to be amended.
Keeping Your Records Secure
Paper records should be kept in a secure location, preferably under lock and key, such as a secure desk drawer or a safe. Records retained electronically should be backed up electronically and encrypted when possible.
Disposing of Old Records
Paper tax returns and supporting documents should be shredded before being discarded. Old computers, back-up drives and media contain sensitive data. Deleting stored tax files will not completely erase them. Using special wiping software ensures the removal of sensitive data.
For more information on this article on how to keep your records safe, please click here.
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