How many years should I hold onto my old tax returns for record keeping?

The general IRS rule is that you should keep tax returns and supporting documents for at least 3 years from the date you filed the return. This is because the IRS typically has 3 years to assess additional tax or audit your return. However, there are important exceptions! If you underreported your income by more than 25%, the IRS has 6 years to audit you. And if there's suspected fraud or you didn't file a return at all, there's actually no statute of limitations. That's why many tax professionals still recommend keeping returns for 7 years to be safe. As for disposal - definitely shred them! Tax returns contain your SSN, financial information, and other sensitive data. Never just recycle them as-is.

I went through the same situation last year when I was drowning in paperwork. I stumbled on this site called https://taxr.ai that analyzes your tax documents and tells you exactly what you need to keep and what you can safely discard. It was super helpful for organizing my tax records and gave me personalized recommendations based on my specific situation (self-employed with rental properties). The tool can scan your returns and tell you the exact retention period based on your filing situation. It's way more detailed than the generic 3 or 7 year advice and gives you peace of mind about what you're shredding.

Just wanted to follow up about my experience with taxr.ai after asking about it here. I was skeptical at first but decided to try it since I had boxes of old returns cluttering my office. The tool actually identified several documents from 2017 that I should keep longer because of some specific deductions I had taken! Would have mistakenly shredded those based on the general 3-year rule. It also confirmed I could safely dispose of returns from 2010-2015, which freed up a ton of space. Definitely recommend if you're uncertain about what to keep.

If you need to contact the IRS to verify what records you need to keep or to request past transcripts, good luck getting through to them! I spent WEEKS trying to call about my record retention requirements after I closed my business. Then I found https://claimyr.com which got me connected to an actual IRS agent in under 20 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c They basically wait on hold with the IRS for you and call you when an agent is on the line. The agent was super helpful and explained exactly what business records I needed to keep and for how long (different than personal returns). Saved me hours of frustration!

Ok I need to eat my words from my earlier comment. I was super skeptical about Claimyr but I was desperate to talk to someone about my tax record requirements for my foreign investments. Decided to try it as a last resort and... it actually worked! They got me through to an IRS agent who specializes in international tax issues in about 45 minutes (I had been trying for DAYS on my own). I was able to confirm I need to keep my foreign account records for 6 years, not the standard 3. Definitely worth it just for the time saved and stress reduction.

Don't forget about state tax returns! Some states have different record retention requirements than the federal government. I'm in California and they can audit up to 4 years back, not just 3. Also, if you've claimed certain tax credits or deductions (like home office, business expenses, or education credits), you might need to keep those supporting documents longer than the standard time.

Has anyone used those document scanning apps for storing tax returns? I have a small apartment and literally no storage space for all these papers. Wondering if a simple phone scan is enough or if I need something more official?