keep returns--how many years

This is what the IRS says:

Lifetime of experience rule of thumb: You generally won't need old records until shortly after the ShredIt truck departs.

I think the best one in the IRS reg is #6 - "Keep records indefinitely if you file a fraudulent return." This kind of goes with the IRS requirement that you have to pay taxes on illegal income. Not speaking from experience, of course. but I would think a person who files a fraudulent return and/or who hides illegal income is probably not too concerned about how many years of records to keep.

For most people, I think the 7-year guideline, though technically unnecessary in most situations, is probably good enough and certainly easy to remember. Personally, I keep enough years of my personal tax filings to fill up one drawer of a file cabinet, though I have digital records of the actual return and attachments going back 30 years.

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Probably true. But those records don't take much space on a hard drive. I have all my tax records going back before 1990, scanned into nice PDFs, so if ever I need to lay my hand on something I can. And notice that the cited article repeatedly says "records", not "originals", so I'm sure that copies of the originals are fine.

Scanning can be a bit tedious, but scanners aren't terribly expensive and you might find it worth the added expense to get a scanner with a sheet feeder. As for software, I use the free Irfanview, which interfaces with the scanner's software to scan multiple pages and produce a PDF.

"Rick" snipped-for-privacy@nospam.com wrote in news:skcjhu$def$ snipped-for-privacy@gioia.aioe.org:

For most issues the statute of limitations is three or six years, so holding on to documents for seven years should normally suffice. But when there has been fraud, there is no statute of limitations.

But there's also another issue. There is sometimes information on a return that depends on information from prior returns. And the string of that information can go on for many more than seven years. So there may be certain situations where returns should be kept for many more years, in case an issue comes up that could depend on information on a return from many years in the past.

Just an example - rental property. I've bought and sold. The one property I own is now 7 years old. I'm happy to keep the tax returns that can document the facts regarding income, depreciation, etc, and that all losses were carried forward each year. Now, I suppose the IRS has transcripts of all prior years, but I'll keep my own copies as well.

Another - cost basis for stocks. I don't recall when brokers were required to track this, but this is a recent change for old people (just looked it up - 1/1/2011. A bit over 10 years. Recent). To be clear - purchases are not reported to the irs, so a purchase is not on the return. But you know it's in that year's manila folder you want to throw out.

MZB snipped-for-privacy@noway.prudigy.net> wrote in news:skc78o$5cm$ snipped-for-privacy@dont-email.me:

I have every return I ever filed, back to the 70s. That includes a couple years when IRS had what they called 1040-PC that you could print at home on a dot-matrix printer. Though I have thrown out most of the j. k. lasser income tax books (tended to keep them because depreciation rules seemed to change every year back then).

Keeping tax returns is the least of my storage issues.

scott s.

In addition to the IRS guidelines, check your state's requirements. Some states add a year to the IRS guidelines (CA comes to mind).

Ira Smilovitz, EA Leonia, NJ