How long should you keep your tax records?

The length of time you should keep a document depends on the action and the expense. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that 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 that the IRS can assess additional tax. The below information contains 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.

If you owe additional tax and situations below, do not apply to you; keep records for 3 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 for 6 years.

  • If you file a fraudulent return; keep records indefinitely.
  • If you do not file a return; keep records indefinitely.
  • If you file a claim for credit or refund; after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
  • If you file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years.
  • Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

When destroying the documents we strongly recommend that you use a cross cut shredder!! We do not advise tearing the documents! A cross cut shredder is your best defense against identity theft!

If the records are connected to assets:
Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. 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.

Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

Special Note:
For Missouri sales and use tax laws, records should be kept at least three to five years. The Department of Revenue recommends that records be retained for five years or as long as necessary to prove that a liability does not exist for periods under audit.

Corporate tax records should be retained in accordance with the same guidance as stated above.