Receipts with bookkeeping ledger and calculator © RTimages / Fotolia

Maintaining tax filing documentation is critical. It contains the answers to questions the Internal Revenue Service could ask years after you file your return.

Although the IRS doesn’t require you to keep your records in a particular way, it does urge taxpayers to keep them “in an orderly fashion” and in a safe place.

Basic records
FOR items concerning your … KEEP as basic records …
Income Form(s) W-2

Form(s) 1099

Bank statements

Brokerage statements

Form(s) K-1

Expenses Sales slips



Canceled checks or other proof of payment

Home Closing statements

Purchase and sales invoices

Proof of payment

Insurance records

Form 2119 (if you sold a home before 1998)

Investments Brokerage statements

Mutual fund statements

Form(s) 1099

Form(s) 2439

Retirement accounts

Form 5498, Roth and traditional IRA contributions

Form 8606, nondeductible IRA contributions

Annual statements

401(k) and other company-sponsored plan statements

Form 1099-R distribution records

Affordable Care Act coverage Form 1095-A, Health Insurance Marketplace Statement

Form 1095-B, Health Coverage

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Form 8965, Health Coverage Exemptions

How long you should hang on to records
IF you … THEN the period is …
File a return and the next 3 situations below do not apply to you 3 years
Do not report income that you should and it is more than 25% of the gross income shown on your return 6 years
File a fraudulent return No limit
Do not file a return No limit
File a claim for credit or refund after you filed your return Later of 3 years or 2 years after tax was paid
File a claim for a loss from worthless securities 7 years

These time frames are for the material used to file your tax return. As for the filing itself, you should hang on to the actual Form 1040 and accompanying schedules and forms forever. This typically is not that much material and, if you prefer, you can convert it to a digital format and keep it stored on your computer, saving trees and space.

Time limit exceptions

Also keep in mind that while the basic IRS review period is 3 years, there are exceptions — in the tax collector’s favor.

If the agency suspects you’ve underreported your income or has questions about a worthless stock write-off, look out. When examiners believe you’ve shorted your income amount on a return by 25% or more, they can come asking questions up to 6 years later. Add another 12 months for queries about that bad investment.

Note, too, that if the IRS is convinced you submitted a fraudulent tax return, tax agents can come after you at any time. There is no statute of limitations on bad-faith filings.