The short answer is, keep records for three (3) years from the date you filed your original return or two (2) years from the date you paid the tax, whichever is later.
Of course anything relating to the IRS never ends with a short answer. For most people that file on time, pay on time that is it. Here are the exceptions:
- Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
- Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
- Keep records indefinitely if you do not file a return.
- Keep records indefinitely if you file a fraudulent return.
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
Do you have documents relating to property? If yes, keep records relating to acquiring the property. You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property. When you sell the property you can refer to the short answer and shred in three (3) years from the date you filed the tax return that included the disposition of the property.