IRS: Save Documents At Least Three Years
Internal Revenue Service spokeswoman Karen Connelly says taxpayers should save most documents related to their tax return for at least three years.
She says that includes W-2 tax forms as well as form 1099 for those who included that form in their return. A few other documents should be saved for seven years.
Other documents would include basically any records or documents that affected a return including such things as receipts, bank statements and any other paperwork that provided the basis for a tax exemption or in any other way effected your return.
Connelly says the general rule is to save the paperwork for exactly three years. So if you filed a return on April 12, 2015, you should keep it until at least April 12, 2018.
Connelly says the documents can be saved either electronically or on paper. But She says if you save the record electronically it's important to have a good backup system, because the agency won't accept a system failure as an excuse for not having documentation.
She also says it's important to have security measures, such as encryption software, in place if you store your records electronically.
Connelly also says there are a few documents that should be kept for at least seven years. those include any documents relating to property or retirement funds that could have an impact on your taxes.
And finally Connelly dispose of any paper documents related to your taxes it's important to shred the paperwork or otherwise make sure it can't fall into the wrong hands.