Tax Records: How Long Should You Keep Documents

The recommendation is to keep copies of tax returns and supporting documents for at least three years. Some should be kept up to seven years in case you need to file an amended return or if questions come up.

Health care information should be kept with other tax records. These include things like employer-provided coverage, premiums paid, advance payments of the premium tax credit received and type of coverage. Generally, you should keep these for three years after filing your return.

How where to store:
While this is ultimately your decision on the best places to store, the IRS suggests that the records be kept extremely safe and secure. Scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive or CD is a great way to ensure your files are backed up and safe.

Whether you do store via a paper filing system or electronically, it’s a good idea that you set a system up that makes these items easy to find.

New for 2017:
It’s also important to have a copy of last year’s tax return as the IRS makes changes to authenticate and protect your identity. Beginning in 2017, some taxpayers who e-file will need information from that return: either the prior-year adjusted gross income or the prior-year self-select PIN.

Disposing of old paperwork:
When certain files are no longer needed for tax purposes, be cautious of how dispose of them. Ensure the data is properly destroyed to prevent identity theft. If you dispose of an old computer, tablet or mobile device, don’t forget it likely has files and personal data stored on it. Removing this might require special disk utility software.