How Long Should You Keep These Tax Documents?

Daniel Penzing
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How Long Should I Keep My Docs?

Artwork, collectibles, and other valuables receipts.

Written Property Acquisitions

Your own receipts and records (for example, bank account statements).

Income Tax Returns

Keep until after any possible IRS audit (usually 3 to 6 years) then shred.

If you are audited, the IRS may ask you to produce your tax return for the years in question.

Brokerage Statements

Legally, brokerage statements and canceled checks are required to be kept for only three years. These documents are both related to a specific time period—the canceled checks are issued three years prior and the brokerage statement reflects activity for the prior year. The only records you’ll need after the three year period are copies of some of your statements. How many depends on how often you trade, as well as your income tax situation.

Retirement Account Statements

How long should you keep historical records for your retirement accounts? It depends on what type of account it is. The IRS requires minimum lifespans for both tax-deferred 401(k) accounts and traditional IRAs, as well as for SIMPLE retirement accounts. In general, the IRS’s rules mean that you must hold onto these documents for about seven years from the time you reach age 70 1/2.

Tax-Deferred 401(k)

For tax-deferred 401(k) accounts, you must retain records for the year in which you turn age 70 1/2, plus six years of tax returns and statements.

Tax-Deferred (Traditional) IRA

For traditional IRAs, held by either you or your spousal beneficiaries, you must keep seven years of income records, 10 years of records for required minimum distributions (required beginning at age 70 1/2) and seven years of statements.

Roth IRA

For contributions to a Roth IRA cash or conversion type only, you must keep seven years of income records, five years of records for required minimum distributions and seven years of statements. For contributions to a Roth IRA that you converted from a traditional IRA, you must keep records for the year in which you reach age 70 1/2, the year you convert, six tax years including the year you convert, and seven years of statements.

Bank Statements

If you are in the United States, Canada, or the UK, you do not need to keep bank statements after a certain time, typically, around 6 years. If you are not in the above areas, please check with your tax advisor.

Credit Documents

There are lots of different reasons why people need to look through their tax records and documents … and we’re not just talking about the folks who are getting ready to file taxes. A large number of folks go to tax documents to find a previous year’s tax return or look to see what they’ve gotten back … ultimately, many people simply look to see how they themselves stack up next to their peers.

If your household finances are generally boring, this article probably won’t be terribly relevant. But if you have a hunch that you’re getting more from the government each year than your neighbor is, then it’s time to crack open the tax records and get to finding out why.

As you’re looking through your records, there are only a few documents that will tell you what matters … and many of them will differ based on your personal situation.

Summary

The Internal Revenue Service requires that taxpayers keep information about a variety of tax-related matters for up to several years after a taxable event occurs. And while this post includes several documents – such as federal and state returns – it’s certainly not an exhaustive list.

However, if you’re facing an audit and wonder whether you’re following the proper IRS guidelines, here are some documents to review to ensure that you’ll be able to show auditors you’ve been filing your taxes correctly.