Record Retention
Guide

Good recordkeeping is essential for accurate and timely tax filings. It ensures:

Faster tax refunds.

Avoidance of late filing penalties.

Eligibility for credits and deductions.

Quick responses to IRS inquiries.

Detailed records also protect you from IRS penalties and help secure tax benefits.

Beyond taxes, records help:

Track income and expenses for budgeting.

Meet lender or insurance requirements.

Preserve proof for property claims.

Always verify non-tax uses before discarding old records.

Keep tax returns and supporting documents for the IRS period of limitations:

3 Years: Standard period after filing.

6 Years: If income over 25% is unreported.

Unlimited: Fraudulent or no return filed.

For property sales or investments, retain records until the tax year of the sale is closed.

Income: W-2s, 1099s, and proof of all earnings.

Expenses: Tuition, mortgage interest, and medical bills for deductions.

Family Status: Marriage, divorce, or adoption documents for credits like the Child Tax Credit.

Capital Gains: Records of property purchases, sales, and improvements.

Adoption Credit: Document all adoption expenses.

Home Office Deduction: Proof of workspace size and related expenses.

Energy Credits: Receipts for solar panels or energy-efficient upgrades.

Cryptocurrency: Track every transaction for accurate reporting.

Use digital receipts, emails, and app transactions as proof.

Clearly separate business and personal expenses.

Track depreciation for long-term business assets.