For most federal tax returns, you can shred the supporting paperwork three years after the return’s due date. That is the baseline for how long to keep tax records, but several common situations stretch the period to four, six, or seven years, and a few remove the time limit entirely. Shred too early and you can lose the ability to back up your numbers if the IRS or your state asks questions later.
The Three-Year Default
Federal law gives the IRS three years from the date you filed to assess additional tax, and that same window is your deadline to file an amended return claiming a refund or credit.1Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection Once that window closes and none of the exceptions below apply, the W-2s, 1099s, receipts, and other paperwork behind that return are safe to destroy.
One detail catches people out. If you file before the April deadline, the three-year clock does not start on the day you filed. It starts on the due date itself. A return filed in February 2026 for tax year 2025 is measured from April 15, 2026, not from your filing date.2Internal Revenue Service. File an Amended Return So you would hold the supporting documents until at least April 2029.
If you later filed a claim for a refund, the math shifts slightly: keep records for three years from the filing date or two years from the date you paid the tax, whichever is later.3Internal Revenue Service. Time You Can Claim a Credit or Refund For most wage earners, whose taxes are withheld from every paycheck, the three-year date is the one that matters.
Six Years If You Underreported Income
The IRS gets double the usual time when a taxpayer omits more than 25 percent of the gross income shown on the return. In that case, the assessment window stretches to six years from the filing date.4Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection – Section: (e) Substantial Omission of Items The threshold is measured against total gross income reported, before any deductions, not adjusted gross income or taxable income.
This rule matters most for people with complicated income streams: freelancers juggling multiple clients, landlords with several rental properties, or anyone who received a 1099-K they might have missed. If there is any realistic chance you underreported by a significant margin, hold your bank statements, 1099 forms, and business revenue records for six years. The IRS recommends the same.5Internal Revenue Service. How Long Should I Keep Records When in doubt about whether you hit the 25 percent mark, keep the records longer.
Seven Years for Worthless Securities and Bad Debts
If you claim a loss from a worthless security or deduct a bad debt, the refund claim window is seven years from the filing deadline for the year the loss occurred, instead of the usual three.6Office of the Law Revision Counsel. 26 U.S. Code 6511 – Limitations on Credit or Refund – Section: (d)(1) Congress carved out the longer period because pinpointing exactly when a security became worthless or a debt became uncollectible is often a judgment call, and taxpayers sometimes do not realize they can claim the loss until years later.
If you hold stock in a company that went bankrupt or you loaned money that was never repaid, keep every record documenting the original investment, the amount you paid, and the circumstances of the loss for at least seven years from the return due date for the tax year the loss applies to.5Internal Revenue Service. How Long Should I Keep Records
When There Is No Time Limit
Three situations eliminate the limitations period entirely, meaning the IRS can revisit a tax year no matter how far back it goes:
- A false or fraudulent return filed with intent to evade tax.
- A willful attempt in any manner to defeat or evade tax.
- No return filed at all for that year.
All three exceptions sit in the same statute that creates the standard three-year rule.7Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection – Section: (c) Exceptions For any year you did not file, or where the return was questionable, keep every supporting document permanently. The burden of proving you were compliant falls on you, and you cannot meet that burden if the records are gone.
Even with a clean filing history, it is worth keeping a copy of the return itself indefinitely. Returns take up almost no space, especially in digital form, and they are the baseline record of what you filed. The supporting documents behind the return are what you can shred on schedule.
Property and Investment Records
Records for assets you own run on a different clock. The IRS says to keep property records until the limitations period expires for the tax year in which you sell or otherwise dispose of the property.5Internal Revenue Service. How Long Should I Keep Records You need these records to establish your cost basis, meaning what you paid plus adjustments like capital improvements, and the basis determines how much gain or loss you report on the sale.
Take a home bought in 2010 and sold in 2035. You would keep the purchase contract, closing documents, and receipts for every capital improvement (a new roof, a kitchen renovation, an added bathroom) for the full 25 years of ownership. After you report the sale on your 2035 return, hold those records for at least three more years, roughly through April 2039.8Internal Revenue Service. Topic No. 305, Recordkeeping If the sale triggered the six-year rule, extend accordingly.
Stock trade confirmations and reinvested dividend records follow the same logic. Your brokerage may only retain records for a limited number of years, so keeping your own copies of purchase dates, prices, and cost basis calculations is often the only reliable way to prove your numbers when you eventually sell.
Nontaxable Exchanges
If you received property through a nontaxable exchange, such as a 1031 exchange for real estate, your basis in the new property carries over from the old one. That means you need to keep the records for the original property as well as the replacement, all the way through the limitations period for the year you finally dispose of the replacement in a taxable transaction.5Internal Revenue Service. How Long Should I Keep Records
Inherited Property
When you inherit an asset, its tax basis typically resets to the fair market value on the date the previous owner died. This stepped-up basis can significantly reduce capital gains tax when you sell, but you have to prove the value. If the estate filed a federal estate tax return, the executor should have provided a Schedule A from Form 8971 showing the reported value.9Internal Revenue Service. Publication 551 – Basis of Assets If no estate tax return was required, an appraisal at the date of death or the value used for state inheritance tax purposes can establish your basis. Keep those documents for as long as you own the inherited property, plus the limitations period after you sell.
Digital Asset Records
Cryptocurrency and other digital assets require the same detailed recordkeeping as traditional investments, but they are harder to track because many transactions happen on decentralized platforms that do not issue standard brokerage statements. The IRS requires documentation of every purchase, sale, exchange, or other disposition of digital assets, along with the fair market value in U.S. dollars at the time of each transaction.10Internal Revenue Service. Digital Assets
Specifically, record the type of digital asset, the date and time of each transaction, the number of units involved, and your basis. If you received digital assets as income or as payment for services, also record the dollar value at the time you received them.10Internal Revenue Service. Digital Assets Keep these records for the same duration as any other investment asset: until the limitations period expires for the year you dispose of the holdings. Given how often crypto exchanges shut down or lose data, downloading your transaction history regularly is more than good practice.
Employment Tax Records
If you run a business with employees, or are self-employed with employees, employment tax records have their own rule: keep them at least four years after the date the tax becomes due or is paid, whichever is later.5Internal Revenue Service. How Long Should I Keep Records This covers payroll records, W-4 forms, records of wages paid, and tax deposits, and applies to income tax withholding, Social Security, Medicare, and federal unemployment taxes.11Internal Revenue Service. Employment Tax Recordkeeping
Certain pandemic-era credits get a longer window. Records related to qualified sick leave wages, qualified family leave wages for leave taken after March 31, 2021, and the employee retention credit paid after June 30, 2021 should be kept for at least six years.11Internal Revenue Service. Employment Tax Recordkeeping
Separately, employers must retain each employee’s Form I-9 for three years after the hire date or one year after employment ends, whichever is later. The forms must be producible within three business days if requested during a government inspection.12U.S. Citizenship and Immigration Services. Retaining Form I-9
Quick Reference
- 3 years. Default for most individual returns and supporting documents (W-2s, 1099s, deduction receipts).
- 4 years. Employment tax records after the tax becomes due or is paid.
- 6 years. If you omitted more than 25 percent of the gross income shown on your return.
- 7 years. If you claimed a loss from worthless securities or a bad debt deduction.
- Until disposal plus the limitations period. Property, investment, and digital asset records.
- Indefinitely. If you filed a fraudulent return, tried to evade tax, or never filed for a given year. Also a smart policy for copies of the returns themselves.
The IRS publishes the same summary on its website.5Internal Revenue Service. How Long Should I Keep Records
State Retention Periods May Be Longer
Federal rules set the floor, not the ceiling. Many states run their own audit clocks that differ from the IRS timeline. Some use a four-year limitations period, and others go further. A document that is safe to shred under federal rules might still be needed for a state examination or refund claim. Before destroying anything, check the retention guidelines published by your state’s department of revenue, and follow whichever period is longest.
How to Destroy Tax Documents Safely
Once a document clears every applicable retention period, do not toss it in the recycling bin. Tax records contain Social Security numbers, bank account details, and income information that identity thieves want. A cross-cut shredder, which cuts paper in two directions into confetti-like pieces, is the most practical option for home use. Strip-cut shredders that produce long ribbons are less secure because determined thieves can reassemble them.
For large volumes, mobile shredding services will come to your location, destroy everything on-site, and haul the waste away. That is often the better choice when clearing out years of accumulated paperwork at once. If you store records digitally, make sure deleted files are actually overwritten rather than moved to a trash folder, and wipe or physically destroy old hard drives and USB drives before disposal.