Surviving Financial Crises

Retaining Financial Records

How long should I keep my personal financial records?

It really varies. The IRS requires that we retain any proof of any income, deductions or credit claimed for at least three years from the date of a return. The IRS also requires that we keep six years’ of records in case we fail to report income that is more than 25% of our gross income in any tax year. If you have ever failed to file a tax return, or filed fraudulently, the IRS can go back as far as they would like, in order to collect what is properly owed. That said, most people agree that keeping six to seven years’ of important financial information, like tax returns, W-2s, 1099s, year-end financial account statements showing income earned, and paychecks, is prudent.

You need to keep records of your finances for several years. The IRS has guidelines for several different cases, but it is easiest to remember, just to be safe, to keep all tax records for at least seven years.


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