Tax Tips: Keep or Toss?

Feb 17, 2016 4:30:54 PM

KEEP: W-2s, 1099s, and brokerage and financial statements to prove income at least three years after you file, or longer if necessary. IRS guidelines state that you should keep documentation for deductions at least three years, but if you’ve underreported income by 25%, the IRS can audit up to six years later. If you filed a fraudulent return or didn’t file one at all, all bets are off--an audit can occur at any time.

DON’T NEED: Receipts that don’t document a tax deduction, as well as credit card receipts and statements that don’t contain tax-related expenses. Make sure to match paycheck stubs against your annual W-2 and verify quarterly retirement and savings statements against the annual summary.