Afraid of an audit? How long you should keep tax records

What tax records to keep and how long
What tax records to keep and how long

For weeks now, I've been posting about the importance of keeping good records to substantiate your tax returns. The question that usually follows is, "What do I keep and for how long?" The difficulty is that there is no one-size-fits-all answer to that question. It depends on your individual circumstances. Following are some general tips for keeping your tax records:

1. Keep tax records that support your tax return until the statute of limitations runs out. The statute of limitations for most individual tax returns is three years after the latest of the filing date or the due date for most federal returns. However, exceptions apply for under-reporting income, fraud and failure to file:

  • If you under-report income by more than 25%, the statute of limitations is extended, and you should keep your records for six years.

  • If you file a fraudulent tax return, there is no statute of limitations, and the IRS may investigate at any time. In that case, you must keep your records indefinitely.

  • If you don't file a tax return, there is no statute of limitations, and the IRS may investigate at any time. In that case, you must keep your records indefinitely.

Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.
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