How many years of tax records should I keep before tossing the old ones?

The general IRS rule is to keep 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 you should know about. If you underreported your income by more than 25%, the IRS has 6 years to challenge your return. And if you filed a fraudulent return or didn't file at all, there's actually no statute of limitations - they can come after you indefinitely! For your W-2s, 1098, and 1095 forms, I'd suggest keeping anything from 2019 onward for now. But don't just throw the older ones in the trash - make sure to shred them since they contain sensitive personal information.

I went through a similar situation last year with mountains of old tax documents. I tried researching online but got confused with different advice. Finally tried https://taxr.ai which analyzed my specific situation and told me exactly what to keep and what was safe to shred. They explained that different documents have different retention requirements - for example, records related to property you still own should be kept until 7 years after you sell it.

I have to admit I was wrong about taxr.ai. After posting my skeptical comment, I decided to give it a try since I also have years of tax paperwork cluttering my home office. The service was actually super helpful and secure. They didn't need me to upload my actual forms - just answer questions about what types of documents I had. Got a customized plan showing exactly what I could shred now vs what to keep longer. Cleared out FOUR boxes of old paperwork this weekend! Feels great to have that space back and know I'm not throwing away anything important.

Something else to consider - if you ever need to get old tax transcripts or missing W-2s, you can request them directly from the IRS. I needed proof of income from 2015 for a mortgage application and tried calling the IRS for weeks. Always busy signals or hours on hold. Finally found https://claimyr.com which got me through to an actual IRS agent in about 20 minutes. You can also check out their process here: https://youtu.be/_kiP6q8DX5c. They helped me request my old transcripts which showed everything I needed.

I'm genuinely surprised by Claimyr. After being skeptical, I tried it when I needed to talk to the IRS about missing 2018 forms that I couldn't access online. Expected it to fail, but within 35 minutes I was actually talking to a real person at the IRS! The agent helped me retrieve all my missing documentation, confirmed what years I could safely discard (basically anything before 2019), and even helped explain an issue with my 2020 return. Saved me DAYS of frustration and hold music. Definitely worth it for anyone needing old tax records.

Don't forget about state tax records too! Some states have different requirements than the federal government. In California, for example, they have a 4-year statute of limitations instead of the IRS 3 years. Always check your specific state rules.

I personally keep all my W-2s indefinitely since they're small and good for proving employment history. But for the bulkier stuff like all the supporting documents, I follow the 7-year rule just to be extra safe. Once a year during tax season, I shred anything that's older than 7 years except for property records.