When it comes to tax documents, it’s important to know how long you should keep them. The general rule of thumb is to keep records for three years from the date you filed your original return. However, there are some exceptions to this rule that you should be aware of.

One of the main reasons why you should keep your tax documents for at least three years is in case the IRS decides to audit you. If the IRS conducts an audit and you can’t produce the necessary documentation, you may be assessed additional taxes, penalties, and interest. Keeping your tax documents for at least three years will ensure that you have everything you need in case of an audit.

Another reason why you should keep your tax documents for at least three years is in case you need to file an amended return. If you discover an error on your original return, you have three years from the date you filed your original return to file an amended return and claim a refund. If you don’t have your tax documents, you won’t be able to file an amended return and claim a refund.

If you claim certain types of deductions or credits, it’s recommended to keep your tax documents for longer than three years. For example, if you claim the home office deduction, you should keep your tax documents for six years from the date you filed your original return. This is because the IRS has six years to audit you if it suspects that you’ve understated your income by 25% or more.

If you own rental property, you should also keep your tax documents for longer than three years. For rental property, you should keep records for at least three years after you’ve sold the property. This is because the IRS has three years to audit you after you’ve sold the property and claimed a loss or depreciation.

In addition, if you have any records related to your retirement accounts, such as 401(k) or IRA, you should keep them until the account is closed or until you have reached the age of 70 and a half.

In conclusion, the general rule of thumb is to keep records for three years from the date you filed your original return. However, there are some exceptions to this rule that you should be aware of. If you claim certain types of deductions or credits, own rental property or have retirement accounts, it’s recommended to keep your tax documents for longer than three years. The most important thing is to keep accurate records and don’t discard your tax documents until you are sure you don’t need them anymore.