It’s a good idea to keep your tax returns indefinitely. You can usually toss supporting documents three years after the filing deadline. The IRS generally has to initiate an audit by then. But there are exceptions. Some tax experts recommend holding on to your records for at least seven years.
Among the most important records to keep for at least three years:
W-2s and 1099s reporting income;
Other 1099s reporting capital gains, dividends or interest;
Form 1098, if you deducted mortgage interest;
Canceled checks and receipts for charitable contributions.
Among the most important records to keep for longer than three years:
Purchase records for mutual funds and stocks held in taxable accounts to calculate the cost basis;
Records of your home purchase, as well as records of significant home improvements;
8606s showing nondeductible IRA contributions so you can prove you’ve already paid taxes on them.
Copyright 2017 The Kiplinger Washington Editors
This article was written by Kimberly Lankford, Contributing Editor and <i>Kiplinger’s Personal Finance</i> from Kiplinger and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.