How long should I keep my tax
and finance records?

The IRS has seven years from the date you file your tax return to bring a fraud claim against you, the tax payer. Unfortunately, we have had cases where overzealous tax officials have tried to bring a fraud claim against a taxpayer who was completely innocent. So, knowing you are innocent of tax fraud is no reason to disregard the following advice. The times suggested here are minimum times, designed to immunize your tax returns from attack.

Tax returns themselves, and the W-2s and Forms 1099 you receive from others must remain part of your permanent files - never discard them. These files must also include purchase and sale escrow closing statements which document your profit from a real estate transaction, as well as any legal documents which contributed to a tax return. Supporting documents for those tax returns, such as, bank statements, cancelled checks, invoices, all receipts, including those for donations, cash receipts, and deposit receipts, should be saved for seven years from the date the tax return was filed.

Marriage certificates, divorce judgments and other legal documents should be kept forever. This applies to all lawsuit judgments and other legal documents, records of military service, immunization records, passports, etc.

There are other finance records which should be kept for seven years or more. It does happen that a creditor will question a payment from long, long ago. In order to avoid controversy regarding a bill, should it arise - any question of whether you paid a bill, or were required to pay a bill - I strongly suggest you keep those records for the rest of your life. The same advice also applies to real estate purchase and sale records, and for large gifts to your heirs.


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