What Income Tax Documents Should You Keep and What Can You Discard? 

By Mark Puckett, CPA | Tax Principal 

Key Highlights 

• Keep income tax returns forever as proof of filing. 

• Hold supporting documents for six years, depending on your situation. 

• Retain property and investment records until six years after the asset is sold. 

• In divorce or separation, keep copies of joint returns and custody agreements. 

• Protect documents using cloud storage or a fireproof safe. 

Once your 2024 tax return is filed, it may be tempting to clear out your files. But before you reach for the shredder or delete old digital folders, consider this: certain documents can still protect you in the event of an IRS audit or help establish the value of assets you sell in the future. 

Keep Your Tax Returns — Indefinitely 

Your filed tax returns serve as the cornerstone of your financial records. These should always be kept permanently. While most supporting documents (like receipts or canceled checks) only need to be retained temporarily, the return itself is essential for confirming what was filed and when. 

Supporting Documentation — Hold for at Least Six Years 

In general, the IRS has three years from the due date of your return (or the actual filing date, if later) to audit you, unless exceptions apply. During this window, you should keep supporting records such as: 

• W-2s and 1099s 

• Receipts and invoices 

• Bank and credit card statements 

• Charitable donation records 

• Medical expense documentation 

If you understated income by more than 25%, the IRS has six years to assess taxes. And if you never file a return, there’s no time limit. Keep signed copies of all returns to prove filing. 

Property and Investment Records — Keep Until Six Years After Sale 

Some documents tie to transactions that span decades. For example, if you: 

• Bought a home in 2009 

• Made improvements in 2016 

• Sold the home in 2024 

For this example, you’ll need to retain documentation from 2009 and 2016 to prove your cost basis on your 2024 tax return. This includes: 

• Purchase documents 

• Receipts for renovations 

• Closing statements 

This same rule applies to investment assets, such as stocks or mutual funds, especially if dividends are reinvested over time. Each reinvestment counts as a separate purchase and should be documented. 

Special Circumstances — Divorce or Separation 

If you’re going through a divorce or separation, secure copies of all joint tax returns and related documents. Access to these records may be difficult later, and both spouses remain jointly liable for taxes filed on a joint return. Also retain custody agreements and any documents stating which parent can claim dependents. 

Protect Your Records from Loss 

Fire, theft, and natural disasters can destroy paper records. To keep your information safe: 

• Use a fireproof safe or bank safe deposit box 

• Maintain digital backups in encrypted cloud storage 

• Organize records in a central location for quick evacuation if needed 

We’re Here to Help 

If you’re unsure about what records to keep and for how long, our team can guide you. Thoughtful record keeping today can help you avoid stress, penalties, and lost deductions tomorrow. Contact your ATA representative for guidance.