How Long to Keep Tax Returns: 3, 6, and 7-Year Rules

For most federal returns, the safe answer to how long to keep tax returns is three years from the date you filed or the return’s due date, whichever is later. That window matches the time the IRS generally has to audit you and the time you have to claim a refund. Some situations extend it: six years if you significantly underreported income, seven years if you claimed a loss for a bad debt or worthless securities, and indefinitely if you never filed or filed a fraudulent return. A handful of specific records, like property purchase documents and gift tax returns, need to survive far longer than any single tax year.

The Three-Year Default

Federal law gives the IRS three years after you file a return to assess more tax on it.¹ File early and the clock still starts on the due date. For the 2025 tax year, the deadline is April 15, 2026, so a return filed in February 2026 is treated as filed on April 15 and the three years run from there.² File late without an extension and the three years run from the day you actually filed.

Everything supporting that return should stay accessible for the full three years: the return itself, W-2s, 1099s, receipts backing your deductions, and records for any credits you claimed. Once the three years are up, the IRS can no longer open an audit or demand more money for that year.

The same clock protects your refund rights. You generally have three years from your original filing date, or two years from the date you paid the tax, whichever is later, to file an amended return claiming money back.³ Miss that window and the refund is gone, however legitimate the claim.

Six Years If You Underreported Income

The assessment window doubles when a taxpayer leaves off a significant amount of income. If you omit gross income that exceeds 25 percent of what you actually reported, the IRS gets six years instead of three.¹ Intent doesn’t matter. A freelancer who forgot about a 1099 from a short project has the same six-year exposure as someone who deliberately hid income. Once the six-year window opens, the whole return is on the table, not just the omitted item.

A separate trigger also stretches the window to six years for unreported income over $5,000 tied to foreign financial assets covered by the foreign asset disclosure rules.¹

If there’s any chance a year’s return understated your income, keep that return along with the bank statements, brokerage records, and sale documents for six years. Six years is also a reasonable default for anyone with complex income sources, side businesses, or foreign accounts.

Seven Years for Bad Debts and Worthless Securities

When you claim a deduction for a bad debt or a loss from worthless securities, the retention period runs seven years from the due date of the return that claimed the loss.⁴ The extra time exists because pinning down the exact year a debt became uncollectible or a stock became truly worthless is genuinely difficult, and the IRS and the taxpayer often disagree about timing.

For a non-business bad debt, the debt must be completely worthless before you can deduct it, and you need to show you made reasonable efforts to collect. For worthless securities, keep records of the original cost and evidence of the event that made the investment valueless. The paper trail should show the original transaction, your collection efforts, and the circumstances that made recovery impossible.

Records That Never Expire

Some records need to stay forever. The IRS can assess tax at any time when a taxpayer either fails to file or files a fraudulent return with intent to evade tax.¹ There is no statute of limitations for unfiled years or fraud. If you have a year where you didn’t file but should have, or you’re worried about a past return’s accuracy, every scrap of documentation for that year needs to survive permanently.

Property Records

Records that establish your tax basis in property need to last as long as you own the property, plus the retention period that applies to the return reporting the sale. Basis records include the purchase price, closing costs, and the cost of any improvements. You need them to calculate depreciation while you own the property and to figure gain or loss when you sell.⁵ In practice, this means holding onto home improvement receipts and closing documents for decades. After the sale, keep those records for at least three more years to cover the return reporting it.

Inherited property adds another layer. An heir’s basis is generally the fair market value of the property on the date the original owner died. Keep the death certificate, any appraisal, and any Schedule A from Form 8971 provided by the estate’s executor for as long as you own the asset and three years past the return reporting its sale.⁶

Gift Tax Returns

Treat Form 709, the gift tax return, as a permanent record. Every taxable gift you make during your lifetime reduces the amount you can pass tax-free at death, so the IRS needs to reconcile every gift tax return when calculating estate taxes. The Form 709 instructions direct taxpayers to keep records as long as their contents may become material and to maintain a running record of transfers and exclusion allocations.⁷ That relevance runs through your estate settlement, which effectively means your lifetime and beyond.

Nondeductible IRA Contributions

If you’ve ever made a nondeductible contribution to a traditional IRA, you have basis in the account that shouldn’t be taxed again on withdrawal. The IRS requires you to keep Form 8606 and all supporting records until every dollar has been distributed from your IRAs.⁸ That includes your 1040 from every year you made a nondeductible contribution, Form 5498 statements showing contribution amounts, and Form 1099-R records for each distribution. Lose these and you may pay tax twice on the same money with no practical way to prove otherwise.

If You Owe Back Taxes

The IRS has a separate 10-year window to collect taxes it has already assessed, running from the date of assessment.⁹ If the IRS assessed extra tax against you three years after you filed, the collection clock runs 10 years from that assessment, not from the original return.

While a balance is open, keep records of every payment, every installment agreement, and every letter from the IRS. Those documents protect you from paying more than you owe or from the IRS pursuing a debt whose collection period has actually expired. Hold everything until the balance is fully resolved and the 10-year window has closed.

Payroll Records for Businesses

Employers face a different retention rule. The IRS requires all employment tax records to be kept at least four years after the tax becomes due or is paid, whichever is later.¹⁰ That covers Form 941 filings, wage records, tip allocations, fringe benefit documentation, and records supporting payroll tax deposits.

A longer period applies to some pandemic-era items. Records related to qualified sick and family leave wages for leave taken after March 31, 2021, and records supporting the employee retention credit for wages paid after June 30, 2021, should be kept at least six years.¹⁰

Charitable Donation Receipts

Charitable deductions attract audit attention, and the paperwork rules are strict. For any cash contribution, you need a bank record or a written receipt from the charity showing the organization’s name, the date, and the amount. A canceled check alone is not enough for gifts of $250 or more. For those larger contributions, you must have a contemporaneous written acknowledgment from the charity stating the amount, describing any property donated, and saying whether the charity provided goods or services in exchange.¹¹

Contemporaneous is the operative word. You need the acknowledgment in hand by the time you file the return claiming the deduction, or by the return’s due date, whichever comes first. Producing it later during an audit will not save the deduction. Keep the acknowledgments, bank records, and receipts for at least three years after you file the return that claimed the deduction.

Storing and Destroying Old Records

The IRS accepts electronic copies. An acceptable storage system produces legible, readable copies on demand, prevents unauthorized changes, and indexes documents well enough that you can find any given item.¹² Scanned copies of paper documents work as long as the scan quality is high enough that nothing is lost. Once you’ve verified the scan is clean, the paper original can go.

When it’s time to dispose of records past their retention period, shred rather than trash them. Tax documents carry Social Security numbers, bank account details, and full income figures, which is everything an identity thief needs. Cross-cut shredding is standard for paper. For hard drives, CDs, or thumb drives, overwrite the data or physically destroy the device. The goal is making the information unrecoverable, not just invisible in your file cabinet.

Don’t Forget State Returns

State income tax authorities set their own assessment windows, and they don’t always match the federal three-year rule. Most states use a three- to four-year limitations period measured from the later of the due date or the actual filing date. Since federal supporting documents overlap heavily with state return documentation, keep everything for whichever period is longer. Check with your state tax agency for the specific period that applies.

Quick Reference by Situation

Filed a complete, accurate return: keep the return and supporting documents for three years from the filing date or due date, whichever is later.
Underreported income by more than 25 percent: keep everything for six years from the filing date.
Claimed a bad debt or worthless securities loss: keep records for seven years from the due date of the return claiming the loss.
Never filed or filed a fraudulent return: keep records permanently. No time limit applies.
Own property (real estate, investments): keep basis records as long as you own the property, plus three years after the return reporting the sale.
Made nondeductible IRA contributions: keep Form 8606 and supporting records until all IRA distributions are complete.
Filed gift tax returns: keep Form 709 copies and supporting documents permanently.
Run a business with employees: keep payroll and employment tax records at least four years after the tax is due or paid.
Owe back taxes or are on a payment plan: keep all records until the balance is fully paid and the 10-year collection period has expired.

1
Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection
2
Internal Revenue Service. Time IRS Can Assess Tax
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Internal Revenue Service. Time You Can Claim a Credit or Refund
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Internal Revenue Service. How Long Should I Keep Records
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Internal Revenue Service. Topic No. 305, Recordkeeping
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Internal Revenue Service. Instructions for Form 8971 and Schedule A
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Internal Revenue Service. Instructions for Form 709 (2025)
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Internal Revenue Service. 2025 Instructions for Form 8606 – Nondeductible IRAs
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Office of the Law Revision Counsel. 26 U.S. Code 6502 – Collection After Assessment
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Internal Revenue Service. Employment Tax Recordkeeping
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Internal Revenue Service. Publication 526 (2025), Charitable Contributions
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Internal Revenue Service. Revenue Procedure 97-22 – Electronic Storage System Requirements