You should keep your tax documents at least until the Statute of Limitations runs out. The Statute of Limitations is the period of time during which the taxing authority can audit and assess taxes on a taxpayer.
- IRS – three years from (1) the due date of the return OR (2) the date on which it was filed, whichever is later.
- Wisconsin Department of Revenue (WDOR) – four years from (1) the due date of the return OR (2) the date on which it was filed, whichever is later.
The Statute of Limitations can be extended in cases of negligence or fraudulent returns. Therefore, we recommend keeping all supporting documents along with your tax returns for at least five years; potentially longer for certain items, like business expenses, worthless stocks, and foreign tax credits.
Business Owners – If you’re unsure which records to keep to substantiate business income and expenses, a list of documents accepted by the IRS is available here.
Consider keeping the following documents indefinitely:
- Closing statement from real estate purchases as well as receipts/contracts showing improvements to property.
- Receipts for medical expenses that will substantiate future distributions from a health savings account.
- Documents showing contributions to a Traditional or Roth IRA.