- Days left
The general rule of thumb for tax records is to keep everything for at least three years, but there are some things you should keep longer. Throughout the year, I recommend that you keep your pay stubs, mortgage statements, bank statements, home purchase and renovation receipts, investment account statements and receipts for anything that might be used on your tax return.

Once you receive your W-2, you can throw out the pay stubs. Once you receive your 1098 for mortgage interest paid, you can discard your monthly mortgage statements. Most of the other documents mentioned above should be kept with your tax return for the three year period. Items related to your home purchase, rental property purchase, or major renovation should be kept until you sell the property.

Anything that has been deducted on the tax return should have documentation in your files, in case the IRS ever questions it. You may have heard that you should keep your records for seven years, rather than the three years I've mentioned above. Three years is the time frame during which the IRS can audit your tax return, while seven years is generally the time period during which the IRS can bring a criminal tax fraud case against you. Since most of us aren't engaged in serious tax fraud, we probably don't need to maintain our records for seven years. Some people still like to be cautious though, and keep the records for the longer period.

You can find more information about good recordkeeping practices at the IRS website.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

Advice for Recent College Grads

Prepare yourself for the "real world".

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

TurboTax Articles

What is Schedule F: Profit or Loss from Farming

If you earn a living as a self-employed farmer, you may need to include a Schedule F attachment with your tax return to report your profit or loss for the year. The Internal Revenue Service defines ?farmer? in a very broad sense?whether you grow crops, raise livestock, breed fish or operate a ranch.

5 Tax Tips for Single Parents

Filing taxes as a single parent requires coordination between you and your ex-spouse or partner. Usually the custodial parent claims the child as a dependent, but there are exceptions. A single parent is allowed to claim applicable deductions and exemptions for each qualifying child. Even though you claim your child as a dependent, she may still have to file her own tax return if she has income, such as from an after-school job.

Add a Comment

*0 / 3000 Character Maximum