The length of time you should retain records depends on the type of document and the transactions involved. Here are some general guidelines:

  • Tax Returns: Keep tax returns for at least 3 years (the general rule). However, the IRS can go back 6 years if you omit more than 25% of your income. If fraud is proven, there is no time limit.
  • Real Estate Records: Retain documents that establish the basis of your property until at least 3 years after selling or disposing of the property.
  • Securities Sales (e.g., stocks or mutual funds): Keep records until 3 years after the sale.
  • Business Payroll Records: Maintain payroll tax records (W-4 forms, payroll returns, tax deposits) for at least 4 years after the due date for employees to file their income tax returns.
  • Worker Health Coverage Forms: Retain these for at least 3 years after the filing deadline.
  • Assets and Depreciation Records: Keep documents related to asset costs and depreciation schedules for as long as you own the assets, and for several years after disposing of them—often decades.

Proper record retention ensures you have the necessary documentation to resolve tax questions or support audits if needed.