How Many Years Do You Keep Tax Returns? 3, 6, and 7-Year Rules

For most people, the answer to how many years to keep tax returns is three — that’s the standard window the IRS has to assess additional tax on a return you filed accurately and on time.1Office of the Law Revision Counsel. 26 USC 6501 Limitations on Assessment and Collection Several common situations stretch that period to six years, seven years, or indefinitely, and a handful of records (property basis, IRA contributions) need to outlast any single return. Here’s how to tell which rule applies to you.

The Three-Year Baseline

Federal law gives the IRS three years from the date a return was filed to come back and say you owe more. Once that window closes, the year is generally settled.

One timing quirk trips people up. If you file early, the IRS treats your return as filed on the due date. A 2025 return mailed on February 20, 2026, counts as filed on April 15, 2026, so the three-year window runs through April 15, 2029.2Internal Revenue Service. How Long Should I Keep Records? File late or on extension, and the clock starts from the actual filing date instead.

So if you filed accurately and on time, keep the return and every document that supports it for three years after the filing date (or the due date, if you filed early). That’s the floor.

Six Years If You Underreported Income

The IRS gets double the normal time — six years — when a taxpayer leaves off more than 25% of the gross income shown on the return.3Office of the Law Revision Counsel. 26 USC 6501 Limitations on Assessment and Collection – Section: 6501(e) This isn’t about a math slip. If your return shows $80,000 of gross income and you failed to report another $25,000 of side income, the omission crosses the line and the six-year rule applies.

The same six-year window kicks in when unreported income of more than $5,000 traces back to a foreign financial asset that should have been disclosed on Form 8938.4Office of the Law Revision Counsel. 26 USC 6501 Limitations on Assessment and Collection – Section: 6501(e)(1)(A)(ii)

For a trade or business, “gross income” under this rule means total receipts before subtracting the cost of goods sold, not net profit. Overstating your basis in property also counts as an omission of gross income. If there’s any doubt about whether you reported every dollar, treat six years as your retention target.

Seven Years for Bad Debts and Worthless Securities

If you claimed a deduction for a bad debt or a loss on a security that became worthless, hold those records for at least seven years from the due date of the return for the year you took the deduction. The seven-year period is built into the refund statute and reflects how hard it can be to pinpoint the exact year a debt went bad or a stock became truly worthless.5Office of the Law Revision Counsel. 26 USC 6511 Limitations on Credit or Refund – Section: 6511(d)(1)

When the Clock Never Runs Out

Two situations remove the statute of limitations entirely. The IRS can assess additional tax at any time, with no deadline:

If either applies to any of your past years, keep every record for that year permanently. Filing a valid return for a previously unfiled year starts the normal three-year clock from the filing date.8Internal Revenue Service. Overview of Statute of Limitations on the Assessment of Tax – Section: Exception 1 No Return Filed

Records That Outlast Any Single Return

Some documents need to stick around far longer than three years because they feed into tax calculations years, sometimes decades, down the road.

Property and Investment Basis

Every asset you buy — a house, rental property, stock, mutual fund shares — has a cost basis that determines your taxable gain or loss when you sell. Keep purchase records, closing statements, brokerage confirmations, and records of improvements until the statute of limitations expires for the year you sell the asset.9Internal Revenue Service. Publication 583, Starting a Business and Keeping Records In practice, that means keeping a home-purchase closing statement for the entire time you own the house, plus three years after you file the return reporting the sale.

Property received in a tax-free exchange follows the same logic. Keep records from both the old and the new property until the limitations period expires for the year you sell the replacement in a taxable transaction. A chain of exchanges can push basis records back many years.

Inherited Property

When you inherit an asset, your basis is generally the fair market value on the date the original owner died, or the alternate valuation date if the estate elected it.10Internal Revenue Service. Publication 551, Basis of Assets If the estate filed a federal estate tax return, you may receive a Schedule A from Form 8971 showing the reported value. Otherwise, an appraisal at the date of death or the value used for state inheritance tax purposes establishes your starting point. Keep whatever document supports the stepped-up basis for as long as you own the asset, plus three years after you sell it.

IRA Contributions

Nondeductible contributions to a traditional IRA create a cost basis in the account. When you take distributions later, that basis determines how much of each withdrawal is tax-free. The IRS says to keep Forms 8606, copies of the first page of each year’s return showing nondeductible contributions, Forms 5498 showing contribution information, and Forms 1099-R for distributions until you’ve taken all distributions from the account.11Internal Revenue Service. 2024 Instructions for Form 8606 For most people that means a lifetime.

Roth IRAs work the same way. You need to track total contributions to prove qualified distributions are tax-free and to show you’ve met the five-year holding period. Without that paper trail, the IRS could treat distributions as taxable — one of the few areas where losing records can cost thousands on what should have been tax-free money.

Foreign Accounts

If you file a Report of Foreign Bank and Financial Accounts (FBAR), you must keep records showing each account’s name, number, institution, type, and maximum value for five years from the April 15th following the calendar year reported.12FinCEN.gov. Record Keeping Requirements If you were required to file Form 8938 and never did, the statute of limitations on the related return doesn’t start until three years after you eventually file the form.13Internal Revenue Service. Instructions for Form 8938 Foreign-account holders should plan on keeping records well past three years.

If You Run a Business or Have Employees

Business income and expense records follow the same three-year rule as personal returns. Records tied to depreciable assets, though, need to last until you dispose of the asset: original cost, method, placed-in-service date, and anything else needed to compute depreciation stay in your permanent records for each asset.14Internal Revenue Service. 2025 Instructions for Form 4562 – Section: Recordkeeping

Employment tax records have their own clock. Keep them at least four years after filing the fourth-quarter return for the year — a year longer than the standard rule and easy to overlook.15Internal Revenue Service. Employment Tax Recordkeeping

State Returns Have Their Own Deadlines

Most states set their own audit windows and they don’t always match the federal timeline. Typical state assessment periods run three to four years from filing, but some states allow longer. Look up your state’s rule separately and keep records for whichever period is longer. If your state piggybacks on the federal return, a federal change that triggers a state adjustment effectively extends how long those records matter at the state level too.

What Counts as a Record

The IRS requires you to keep any record supporting an item of income, deduction, or credit for as long as that item could be questioned.16Internal Revenue Service. Topic No. 305, Recordkeeping The return itself is only a summary. The documents that back it up include:

  • Income documents: W-2s, every variety of 1099, K-1 schedules from partnerships or trusts, and records of digital asset transactions.17Internal Revenue Service. Gather Your Documents
  • Deduction records: receipts, bank statements, canceled checks, and invoices proving business expenses, medical costs, or charitable gifts.
  • Credit records: Form 1095-A and premium payment records if you claimed the premium tax credit through the Health Insurance Marketplace.
  • Basis records: closing statements, brokerage trade confirmations, and records of capital improvements.

These supporting records are what an auditor actually asks for, so they need the same retention treatment as the return.

How to Store and Dispose of Records

Digital copies are the practical choice for most people. The IRS accepts electronic records as long as the storage system produces legible, readable copies and includes reasonable safeguards against unauthorized changes or data loss.18Internal Revenue Service. Revenue Procedure 97-22 Electronic Storage System Requirements Scan at a resolution where every number is clearly readable, organize the folders, and keep at least one backup in a separate location.

If you keep paper, a fireproof safe or locking filing cabinet protects against fire and theft. Either way, the test is the same: if the IRS asks for a document three years from now, can you find it and produce a clear copy?

When the retention period passes, destroy the records rather than tossing them in the trash. Tax documents hold Social Security numbers, bank details, and income information — the whole kit for an identity thief. Shred paper with a cross-cut shredder. For files, use a secure-delete tool that overwrites the data instead of just moving it to the recycle bin.

What Happens If You Can’t Produce Records

During an audit, the burden of proof for deductions and credits falls on you. You need documentary evidence — receipts, bank records, mileage logs — to substantiate what you claimed.19Internal Revenue Service. Burden of Proof If you can’t produce it, the IRS disallows the deduction. No grace period, no exception for good intentions.

The math gets ugly fast. Losing records for a $15,000 home-office deduction doesn’t just cost the deduction. It means back tax on that amount, interest from the original due date, and potentially an accuracy-related penalty. The cost of a few extra years of storage is trivial next to the cost of a single disallowed deduction you can no longer defend.

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