How many years of tax records should I keep before tossing old W-2s and 1095 forms?

What about electronic copies? If I scan all my old W-2s and 1095 forms, is that considered valid if I ever did get audited? I'm in the same boat with a decade of paper forms taking up space.

Yes, electronic copies are perfectly acceptable to the IRS. The IRS accepts scanned or digital documents as long as they're legible and contain the same information as the paper originals. Just make sure you have a reliable backup system for your digital files – store them in multiple places like an external hard drive and cloud storage. For best practices, scan them as PDFs rather than images, as they're typically smaller files and easier to organize. I also recommend creating a simple file naming system that includes the tax year and document type for easy reference if needed.

How exactly does that work? Do you have to upload all your tax documents to their site? I'm always nervous about putting financial docs online.

Does it actually tell you specifically which documents you can shred versus just giving general guidelines? Because I can find the general rules anywhere online.

You don't need to upload all your documents - you just answer questions about what types of tax situations you have (property, investments, self-employment, etc.) and it creates a customized retention schedule. They use encryption and don't store your actual documents, which was important to me too. It goes way beyond general guidelines. It created a specific checklist for me showing exactly which documents I could shred by year and type, and which ones I needed to keep for longer based on my specific tax situations like having rental property and some stock losses. It also flagged some documents related to my home office deduction that I needed to keep longer than I would have thought.

Wait, how does that even work? The IRS phone system is notoriously impossible. Is this some kind of priority line or something?

Sounds like a scam to me. Nobody can magically get through the IRS phone system when millions of people can't get through. What's the catch here?

It's not a priority line - they use technology that continuously redials and navigates the IRS phone tree for you. When they get a live agent, you get a call connecting you directly. No magic, just automation doing the waiting for you. There's no catch - it's just a service that handles the wait time instead of you having to sit on hold. I was super skeptical too, but I was desperate after trying for weeks. They only charge if they actually connect you to an agent. I confirmed what I needed about my 2016 returns so I could finally clean out my files.

Do you know about New York? Our state taxes are always more complicated than federal and I don't want to screw anything up.

New York generally follows the 3-year federal guideline, but they can go back 6 years if they suspect substantial underreporting (similar to the IRS). If you've filed accurately, 3 years is typically fine, but I personally keep NY returns for 6 years just to be safe since they can be more aggressive with audits. For special situations like claiming net operating loss carryovers or certain business credits, you might need to keep supporting documentation even longer. I recommend checking the NY Department of Taxation and Finance website for any specific situations.

You're definitely not alone! I still have returns from 1998 in a box in my attic. I know it's ridiculous but I can't bring myself to throw them away. My wife makes fun of me every tax season when I add another folder to the collection.