After my dad died, my siblings and I began sorting through the things he left behind. That included the expected things, like clothes and photographs, and the unexpected things, like financial records tucked into places we hadn’t known existed. When we were finally able to open the locked cubby behind my dad’s bed, my brother found, among other things, copies of my dad’s tax records dating back to the 1970s.
My dad had saved everything. What should we, his children, do with all that paper? After death, certain old records can be shredded. But be careful–both tax filing and tax debts live on after death. And death also creates some new records that will need to be saved.
A common example: If your parent owned a home at death, the property typically receives a step-up in basis to its fair market value as of the date of death. In that case, decades old records supporting the house’s purchase price and the improvements made to it may no longer be needed for tax purposes—as they still are for your own house.
But you will need to keep records supporting the stepped-up basis, such as the date-of-death appraisal or valuation, the deed, the death certificate, probate or trust distribution documents, and any inheritance or estate tax return, if one was filed. You should also keep records of any post-death improvements you make, including repairs. Even if the basis is not an issue at death, it could be important when the property is sold later. (Also, records of recent improvements should be saved, not because the IRS will want them, but because a prospective buyer might. A five-year-old roof or furnace? Those are selling points.)
Here’s a guide to what to keep for tax purposes, whether you’re dealing with a late parent’s records or your own.
The general rule is to hold on to your tax returns and supporting documentation until the period of limitations has run for the IRS to assess additional tax or for you to claim a refund. Supporting documentation for your tax returns includes not only your forms W-2 and 1099 but also credit card and other receipts, invoices, mileage logs, copies of checks, proofs of payment, and any other records that support items you reported or deductions you claimed on your return.
The standards here revolve around the statute of limitations, which is the legal deadline for you or the government to take a specific tax-related action. If you file a correct and timely tax return, the statute of limitations for the IRS to assess additional tax is generally three years from the date you filed the return. If you file before the due date, the return is generally treated as filed on the due date. Remember, you file your tax return after the tax year ends. That means, for example, the statute of limitations for a timely-filed 2025 tax return (the tax year ending December 31, 2025) begins to run on April 15, 2026. You'll want to keep those records until at least April 15, 2029.
If you apply for an extension and file your taxes after April 15, the three-year assessment period generally runs from the actual filing date, not April 15. If you file an amended return, the statute of limitations for your original tax return applies. It does not give you a brand new three-year assessment period for the original return.
For refund claims, the timing is slightly different. You generally have three years from the date you filed the original return or two years from the date you paid the tax, whichever is later, to file a claim for credit or refund. If you filed before the due date, the return is generally treated as filed on the due date.
Some tax professionals routinely advise their clients to assume a six-year statute of limitations–which can apply in certain cases, even though the usual rule is three.
For example, if you don't properly report all of your income (generally, if you omit more than 25% of the gross income that should be shown on your return), the statute of limitations will be extended. In that case, you should keep those records for at least six years after filing. (Also, consider getting a different tax professional.)
If you file a clearly fraudulent return or don't file a return, the statute of limitations never runs. That means there is no time limit on IRS action, and the agency can audit you at any time. In that event, you'll want to hold onto your records forever. And in that case, you absolutely want to get a better tax professional and possibly a criminal defense attorney.
If you omit income over $5,000 related to one or more specified foreign financial assets, the statute of limitations is six years. Keep in mind that a failure to file an information form (for example, Form 8938, which applies to certain specified foreign financial assets), doesn't result in a pass under the three-year rule: If you fail to file or properly report an asset on an information form like Form 8938, the statute of limitations for the tax year is extended to three years following the time you provide the required information. The good news? If the failure is due to reasonable cause, the statute of limitations is extended only with regard to the item or items related to such failure and not for the entire tax return.
In addition to copies of the returns and forms you filed, you'll want to keep supporting documentation, such as confirmations of charitable contributions or medical receipts (assuming you claimed those deductions). And if you claimed the premium tax credit, keep Marketplace coverage records, Form 1095-A, and information about advance credit payments and premiums paid.
If you make an adjustment to a tax return—for example, correcting a reporting error related to Form 1099-K—keep records to support the change. That would include the form that was issued, any related correspondence if you contacted the issuer, and, importantly, information about the underlying transactions.
You may also need to keep documentation to support transactions that will be reported on future tax returns. For example, you may want to retain your IRA records—including nondeductible traditional IRA contributions and Roth contributions—until the money is withdrawn and the tax treatment is no longer relevant.
These records are also important for inherited retirement accounts. The heirs to a traditional IRA usually have to pay income taxes on every penny of the distributions from the account. But if they have records establishing that some of the contributions to the account were made after tax, that would shield at least a small portion of the distributions from tax.
When sorting records after a death, also be careful before shredding documents tied to the final individual income tax return, estate or trust income tax returns, estate tax filings, inherited property, life insurance, debts, or assets that may still need to be transferred or valued. Those records may be needed by the executor, beneficiaries, tax preparer, attorney, or financial institutions even if the ordinary income tax statute has run.
If you buy capital assets like stocks, bonds, or real estate, you’ll want to keep records that support your basis—typically your purchase price plus adjustments—for as long as you own the property and until the limitations period expires for the year you dispose of it. Don’t forget that capital assets can include digital assets, including bitcoin and other cryptocurrencies.
If you claim depreciation, amortization, or depletion deductions for certain assets, including real estate, keep related records for as long as you own the property and until the limitations period expires for the year you dispose of it in a taxable transaction. Also, for nontaxable exchanges, such as 1031 exchanges, the IRS says to keep records of both the old and new property until the limitations period for the year the new property is disposed of expires.
If you claim special tax deductions and tax credits, you may need to keep your records longer than usual. For example, if you file a claim for a loss from worthless securities or a bad debt deduction, you should keep those records for seven years from the date you filed the return on which the loss was claimed.
If you receive property as the result of a gift (say, from a parent, while that parent was alive) your basis is generally tied to the donor’s basis, so don’t toss those old records just because you’re the new owner of the assets.
If, on the other hand, you inherit property after someone’s death, then your basis is generally stepped up to its market value as of the date of death. That means some old basis files are expendable. The same general rules apply not only to a house but to other assets, like stocks and bonds, closely held business interests, cryptocurrency, and collectibles. For those assets, keep records showing the date-of-death value and any adjustments to basis after death until the asset is sold or otherwise disposed of—and then until the statute of limitations for that year has expired.
You should keep your parents’ final Form 1040 and supporting records for at least three years after the return is filed — and longer in some cases, since the statute of limitations may extend to six years or more depending on the issue. That’s because a deceased person’s final return can still be audited. At that point, it becomes the estate’s representative’s or the surviving spouse’s problem to solve.
When it comes to supporting records, you’ll want to keep anything needed to prove a position on a tax return, establish your basis for any capital assets, or document anything related to estate administration for at least as long as the statute of limitations remains open.
Keep your records organized—I recommend arranging them by year—and store them in a safe place. A filing cabinet will do, but it should be fire and water-resistant. And consider where you’re storing records—keeping them in a basement or attic with a moisture problem isn’t ideal, but storing them off premises may also pose a challenge. If the IRS comes calling, you'll want to be able to produce legible records in a timely manner.
To save space in your filing cabinet—and quite possibly, your sanity—you can scan and store your records electronically. The IRS has accepted scanned records since 1997, a policy memorialized by Rev. Proc. 97–22. Your scanned or electronic receipts must be as accurate as your paper records, and you must be able to index, store, preserve, retrieve, and reproduce the records if asked. In other words, you need to have your records organized and be able to produce them in hard-copy form if required.
It might sound like we’re telling you to save everything. We’re not. Consider throwing away:
Don’t forget state and local tax rules. Your state or locality’s record retention or assessment period may be different from the federal rule, so check before destroying records.
When you're ready to toss your old records, have a shredder handy. Don't simply throw them into the recycling bin or trash can—your records have personally identifying information, as well as details about your finances, that you want to keep private and away from potential identity thieves. I have a shredder in my home office, but if you don't own one, look around. Some office supply stores and shredding companies will shred documents for a fee, and some will even come to your house or office. There are also free services available—a neighboring township, for example, hosts a shredding event several times a year (and for skeptics, the shredding company will let you watch the shredding on their TV monitor in the truck).
The same care should be taken with electronic records. Don't simply toss old laptops, hard drives, or phones into the trash. Wipe them clean or, better yet, have a professional do it for you. E-shredding or electronic shredding services are also available in most areas.
The bottom line: Technology has made it easier to store tax records and offload paper, but that doesn’t mean that you should be reckless. Be thoughtful about what records to keep and what records to toss and be just as thoughtful about how to do it.
ForbesWhat To Do With All Your Parents’ Stuff–And Your OwnForbesAfter Death, Income Tax Filing And IRS Debts Live OnBy Kelly Phillips ErbForbesWhere Not To Die In The U.S. In 2026By Kelly Phillips ErbForbesInherited Retirement Accounts: What You Need To Know NowBy Kelly Phillips Erb
此内容由惯性聚合(RSS阅读器)自动聚合整理，仅供阅读参考。 原文来自 — 版权归原作者所有。