Irs how long to keep receipts

Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out. The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax.

The information below reflects the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed.

Returns filed before the due date are treated as filed on the due date. Note: Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return. The following questions should be applied to each record as you decide whether to keep a document or throw it away. Generally, keep records relating to property until the period of limitations expires for the year in which you dispose of the property.

That may include records for depreciation, amortization, or depletion deduction, all of which will figure into whether you are going to realize a gain or loss when you sell the property.

Your taxable gain when selling a home , or disposing of property, is not necessarily the same as the difference between the purchase and sale prices. For those who own utilizing exchanges on their real estate, you will need to keep your tax records even longer.

Since that transaction is a nontaxable exchange, your basis in the new property will be the same as your basis in the property you owned before the exchange, plus any additional money you paid into the cost basis.

In that case, you must keep records for the old property, as well as the new property, for at least three years after you sold the newer property and filed the corresponding taxes. The exception is if you were to do another exchange. In that case, you should keep everything forever. Kidding aside, you will need to keep records all the way back to the first property through the current property, which in many cases, can be decades.

That is a lot of tax records to keep track of. Depending on where you live, you may need to keep state tax records longer than the IRS requires for Make your life simple; keep your state tax documents as well.

The rules will vary from state to state, so take a moment to figure out how long your state expects you to keep tax records. With that timeframe, California residents should keep their state tax records for at least four years. There is so much personal information on your tax returns, your Social Security number, for example.

Once you have scanned your tax documents, make sure to dispose of them in a secure manner. At the very least, shred them before throwing them in the trash. Beyond your actual tax returns, check and see if you need any of the supporting tax documents for other purposes. You should keep any contracts for things like auto loans, home mortgages, insurance documents, medical bills, and warranty information. The list of documents you should keep is much longer than the list of what the IRS requires.

Getting rid of unwanted paperwork is easier than ever. A scanner will make things a lot easier. Purchase your own, or if you have one at work, use it when you are allowed to return to the office. The biggest downside of not having your own scanner at home is dragging all of your paperwork and personal information into your workplace.

However, they may not be as easy to use for odd-sized receipts or other paperwork. What I love about this scanner is that it is easy to feed stacks of paper into.

Once you have scanned your documents into the computer, they are searchable, which is helpful when you need to find old receipts or warranty information. You will also be able to scan directly to the cloud. A scanner like this excels because of its adjustable paper feeder.

It makes scanning various receipts, in multiple sizes and shapes, easier. We all want things to be quick and easy whenever possible. The IRS recommends keeping returns and other tax documents for three years or two years from when you paid the tax, whichever is later. The IRS has a statute of limitations on conducting audits and it is limited to three years.

There are some exceptions — keep documents for worthless stocks or bad debt reduction for seven years, says Nell Curtis, an accounting instructor at Milwaukee Area Technical College in Wisconsin.

Keeping tax records used to be more of a headache than it can be today, says Valrie Chambers, CPA and an associate professor of taxation and accounting at Stetson University in DeLand, Florida.

This is in part because many people now have decluttered their offices and store their documents digitally. Many institutions also now issue digital copies of your tax forms, further reducing your tax paper trail.

You can also protect your files and folders by adding a password. Keep those e- documents secure. The IRS also keeps a record of your tax returns from previous years. You can request a transcript online, by phone or by mail the IRS will ask for proof of identification, including your Social Security number.

Taxpayers should also maintain copies of tax returns and related documents themselves, Curtis says. Keeping your own records prevents any potential problems if your CPA sells their business, retires, loses their records in a fire or flood, or dies. Deeds, titles, stock and other investment authentications and valuations would be the exception to the scan rule.

Ellen Chang is a freelance journalist who is based in Houston and writes articles for U. Chang previously covered investing, retirement and personal finance for TheStreet. She focuses her articles on stocks, personal finance, energy and cybersecurity. She is a proud graduate of Purdue University and a lover of random acts of kindness, volunteering and cats and dogs. Follow her on Twitter at ellenychang and Instagram at ellenyinchang.

Select Region.