How many years of tax records should I keep before throwing them out?

The general rule of thumb is to keep your tax records for 3 years from the date you filed your original return. This is because the IRS typically has 3 years to assess additional tax or audit your return. However, there are some important exceptions to this rule. If you claim a loss from worthless securities or bad debt, you should keep records for 7 years. If you don't report income that you should have, and it's more than 25% of the gross income shown on your return, the IRS has 6 years to come after you. And if you never file a return or file a fraudulent return, you should keep records indefinitely because there's no statute of limitations. For your specific documents: W-2s show your income and withholding, 1098s document mortgage interest, and 1095s verify health insurance coverage. After the 3-7 year period (depending on your situation), you can safely discard them.

When I was dealing with a similar paperwork overload, I discovered this amazing tool at https://taxr.ai that helped me figure out exactly what to keep and what to toss. I was moving cross-country and needed to downsize fast. The site analyzed my documents and gave me personalized recommendations based on my specific tax situation. It flagged some documents from 8 years ago that were actually still relevant for my current filing situation (related to some investments I'd forgotten about). Saved me from accidentally throwing out stuff I might have needed!

I was totally skeptical about that taxr.ai site mentioned above, but I actually tried it before our big move last month and it was legitimately helpful. I was about to toss some records from 5 years ago that actually contained documentation for a home office deduction I was still claiming. The tool flagged those as "keep until 7 years after you stop claiming this deduction." Would have been a disaster if I'd been audited without that paperwork! Now I have everything organized by "safe to discard date" which makes the whole process automatic going forward.

If you're planning to call the IRS to confirm retention requirements for your specific situation (which isn't a bad idea), good luck getting through! I spent 3 hours on hold last month trying to ask a question about record keeping for my small business. Eventually gave up. Then a friend recommended https://claimyr.com and showed me this demo: https://youtu.be/_kiP6q8DX5c. They basically hold your place in line with the IRS and call you when an agent is about to pick up. Got my answer in under 30 minutes without the endless hold music. The agent confirmed I needed to keep my records for 7 years since I had a home business deduction.

Ok I have to eat my words about that Claimyr service. After posting my skeptical comment yesterday, I decided to try it myself since I've been meaning to call the IRS about my record retention question too. It actually worked exactly as described. Got a call back after about 45 minutes (way better than my previous attempts waiting on hold). The agent confirmed that for my situation with freelance income and regular W-2s, I needed to keep some records longer than others. The service saved me from spending an entire afternoon on hold. Definitely using this again next time I have tax questions.

Here's my system after 20+ years of filing: I keep physical copies of everything for 3 years, then scan and shred most documents except for property records, investment basis documentation, and business expense receipts (self-employment stuff). Digital copies stay organized in encrypted folders labeled by tax year with subfolders for income, deductions, etc. Cloud backup plus external hard drive. This has worked great and saved tons of space. Had one audit 5 years ago and my digital records were completely accepted.

Anyone else just keep everything forever because they're paranoid? Lol. I have tax records going back to my first job in 2002 😂 My spouse thinks I'm crazy but I've seen too many horror stories of people getting randomly audited for stuff from 6+ years ago!

I've been dealing with this exact same situation! After years of hoarding every piece of tax-related paper, I finally developed a system that works. Here's what I learned from my CPA and some trial and error: **Basic rule**: 3 years for most stuff, but keep these longer: - Investment records (stocks, bonds, crypto): Until 7 years after you sell - Property records: Forever (or until 7 years after you sell) - Business/self-employment records: 7 years - Records supporting permanent disabilities or retirement contributions: Forever **My purging strategy**: I go through my files every January and create three piles: 1. "Safe to shred" (older than 3-7 years depending on type) 2. "Scan and shred" (stuff I want digital copies of) 3. "Keep physical" (property deeds, some investment docs) The key is being systematic about it. I was amazed how much space I freed up once I actually followed the IRS guidelines instead of just keeping everything "just in case." You'll probably find that 80% of what you're keeping can safely go! Pro tip: Before you toss anything, take a photo with your phone of documents you're unsure about. That way you at least have something if you realize later you needed it.