NEW YORK (MainStreet) —You’ve filed your 2012 tax returns, and either paid your taxes or spent your refund. How long should you keep a copy of these returns?
I believe you should keep the paper copy of your federal tax returns (Form 1040 or 1040A plus all Schedules and Forms) forever. This provides a permanent record of your financial history. You never know when the information on a prior year’s return will come in handy for a variety of tax or financial reasons, or just to satisfy personal curiosity.
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The time period for keeping all other tax return records relies on the fact that the IRS, and most state tax agencies, has three years from the due date of a tax return (some states have four years), or filing date if you had any extensions or filed late, to audit and revise that return. If you filed your 2012 Form 1040 by the April 15, 2013 due date, Uncle Sam has until April 15 of 2016 to audit the return and assess additional taxes.Except in the case of tax fraud - if the IRS auditors can prove tax fraud they can go back forever.
I recommend keeping all of the back-up documentation for a tax return for four full years. This includes all applicable bank statements and cancelled checks as well as W-2s, 1099s, 1098s, worksheets and appropriate receipts and bills. You can toss all such information for your 2012 tax return on April 16, 2017.
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Certain documentation requires longer holding periods.