During tax season 2023, you may wonder how long you should keep your old tax returns For more info and other paperwork associated with filing your taxes. For those with hard copies of your taxes, you might wonder if you can scan them. Or do you need to keep hard copies? Keep reading as I share how long you should keep your old taxes and how to get them out of your way, hopefully.
How long do you need to keep old tax records, receipts, and total tax returns (state and federal)? Another common question is how to safely store these tax docs without feeling like you are a hoarder. While providing tax-planning guidance over the years, I’ve met several people with countless boxes full of old receipts, documents, and tax returns. While some tax documents needed to be kept, most could have been shredded and thrown away long ago.
What Does The IRS Say About Keeping Old Tax Returns?
According to the Internal Revenue Service, the length of time you should keep your tax documents will depend on the type of files you are talking about and what kind of taxable transactions the paperwork relates to. In plainer English (but still vague), you should keep any tax records to support your income, various tax deductions, tax credits, and exemptions until at least the period of limitations for each tax return ends. If you aren’t a certified public accountant or a certified financial planner, you are likely wondering what that means for me and my stacks of tax documents. I’ll explain below.
According To The IRS, What Is The Period Of Limitations?
The period of limitations is when you can still amend your tax returns to claim a tax credit or refund. The IRS may still assess you with additional tax liabilities during this period. Specific examples of this are listed later in the article. Unless stated otherwise, a period of limitations refers to years after the taxes were filed. Tax returns filed early are considered filed on the tax deadline, usually around April 15. However, the time period of limitations for returns filed on extension (typically after April 15) will be years from the actual date the taxes were filed.
Note: I’m a fan of keeping copies of your filed tax returns indefinitely. Access to copies of your older tax returns may help prepare future tax returns and make computations if you need to file an amended return. With the help of easy scanning and cloud storage of old tax docs, I don’t see many reasons to delete older tax returns. I think we could all save a lifetime of tax returns on our computers without putting a dent in our storage limits.
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