What is the retention time on old tax returns?

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Keeping tax records is beneficial for a taxpayer. Using old returns provides previous examples of how to file your taxes in any future returns. Keeping old records also allows taxpayers to file amended returns more easily by having the information quickly available.

Document retention is due to statutes of limitation for different scenarios. A statute of limitations is the amount of time the IRS has to find something wrong with your tax return. If the IRS finds an error or mistake after the statute of limitations runs out, the IRS cannot force you to pay anything you may owe from those previous returns. However, if the IRS does find errors in your return before the statute of limitations is over, the IRS may audit your return and request additional taxes.

Did Not Report Some Income

If you failed to report 25 percent or more of your annual income, then keep your previous tax records for six years.

Fraud

If you committed fraud on your tax return, you should keep your records indefinitely. Fraud is intentionally under-reporting your income or lying on your income tax return.

Filing for a Credit or Refund After You File Taxes

If you end up filing for a credit or refund after you already submitted your tax return, you should keep your documents for the latter of three years from when you originally filed or two years from when you paid your taxes for that tax return.

If You Filed a Loss For Bad Debt or Worthless Security

If on your original tax return, you reported a loss of either a bad debt or a worthless security (e.g. stocks or bonds), you must keep your tax records for seven years.

Employment Tax

Keep any employment tax records associated with your tax return for the latter of four years when the tax is due or you pay the tax.

Source:

IRS: How Long Should I Keep My Records?

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What is the retention time on old tax returns?

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