· Charles Trautman, EA
How long to keep tax records
Three years, for most people. That answer is right often enough to be useful and wrong often enough to be worth ten minutes of your time, because the exceptions are the situations where records actually get asked for.
Why three years is the default
The number is not a filing convention, it is a deadline. The IRS generally has three years from the date you file to look at a return and assess additional tax. Once that window closes on a normal return, the supporting paperwork has done its job.
Two details change the start date. Filing early does not start the clock early: a return filed in February still runs from the April due date. Filing late does the opposite, and the clock does not start until you actually file.
The periods, in one table
| A normal return, tax paid | 3 years |
|---|---|
| Income understated by more than 25% | 6 years |
| Worthless securities or a bad debt deduction | 7 years |
| Employment tax records, if you have employees | 4 years after the tax is due or paid |
| You filed a claim for a credit or refund | 3 years from filing, or 2 years from paying, whichever is later |
| You did not file a return | No limit |
| A fraudulent return | No limit |
The last two are the reason the honest answer is never simply "three years." There is no statute of limitations on a year you never filed. If you have unfiled years behind you, those records stay relevant until the return is filed, and the clock only starts then. Back and prior-year returns are ordinary work, and the paperwork you kept makes them far cheaper to sort out.
The one almost everyone gets wrong
Records that establish what you paid for something are not governed by the year you bought it. They are governed by the year you sell it.
Your basis in a house, a rental, or a brokerage position is what the gain gets measured against when it is eventually sold. So the closing statement from a purchase in 2009, the invoices for the kitchen you replaced in 2016, and the record of every improvement in between all stay live until three years after you file the return reporting the sale. That can easily be thirty years of keeping one folder.
The same logic covers depreciation schedules on a rental, cost basis on inherited or gifted property, and records of non-deductible IRA contributions, which decide how much of a future distribution is taxable. If a document proves what something cost you, it outlives the ordinary three-year rule.
What Colorado adds
A Colorado return is built on the federal one, so a federal change usually flows through to the state. In practice that means keeping the Colorado copy for as long as you keep the federal copy rather than treating them as separate piles. If you have moved between states, keep the part-year returns for both, because apportioning income between them is the first thing anyone asks about later.
Paper or digital
Digital is fine. The IRS accepts electronic records, and a scan is worth more than a receipt that faded to nothing in a shoebox. Two conditions matter: the copy has to be legible and complete, and it has to still exist. A single hard drive is not a records system. Something backed up in a second place is.
The return itself is small enough that there is no reason to ever throw it away. It is the supporting documents, the receipts and statements and mileage logs, that follow the schedule above.
Before you shred
Check three things. Whether the year is fully closed under the table above. Whether anything in it establishes basis in something you still own. Whether a lender, an insurer, or an estate might want it even though the IRS is finished. Once all three are clear, shred rather than bin it: an old return holds a Social Security number, an address history, and an employer.
Common questions
How many years of tax records should I keep?
Three years covers a normal return where the tax was paid. Keep six years if income was understated by more than 25%, seven for a worthless security or bad debt deduction, and four years of employment tax records if you have employees. There is no time limit if a return was never filed or was fraudulent.
How long do I need to keep records for a house I own?
Until three years after you file the return reporting the sale. Purchase documents and improvement receipts establish your basis, which is what the gain is measured against when you sell, so they can matter decades after the purchase.
Can I keep tax records digitally instead of on paper?
Yes. The IRS accepts electronic records. The copies need to be complete and legible, and backed up somewhere other than one hard drive.
How long should I keep tax records if I never filed a return?
Indefinitely. The assessment window never opens for a year that was not filed, so there is no point at which those records become safe to discard. Filing the missing return is what starts the clock.
General information from Tax Shop in Lone Tree, Colorado, current as of August 11, 2026. Tax rules change and every return is different, so this is not advice about your own situation. Ask us about your return.