This is a question that involves some level of phycology. Ultimately you should keep any record, be it tax or otherwise, for the period of time where you are comfortable.
It’s generally best practice to keep tax forms and supporting paperwork related to:
- Income (W-2s, 1099s, etc.)
- Expenses and corresponding deductions (Invoices, charitable donation receipts, etc.)
- Property (Property tax assessments, purchase records, etc.)
- Investments and retirement accounts (401(k) statements, distribution statements, etc.)
The IRS recommends taxpayers keep their returns and any supporting documentation for three years after the date of filing; after that, the statute of limitations for an IRS audit expires.
If you've under-reported income by 25 percent, however, the IRS can go six years back, or seven if you claim a loss for bad debt or worthless securities.
If you don't file, or if you file a fraudulent return, the IRS has no statute of limitations; so it may be best to keep your records indefinitely.
The statute of limitation may be longer in certain states.
Special note as well, for homes, personal or rental, you want to keep all the records for them from the time of purchase to the expiration of the statute of limitations. This includes, but is not limited to, purchase closing statements, improvements, special assessments, etc.
See this article for more details: https://turbotax.intuit.com/tax-tips/tax-planning-and-checklists/how-long-do-federal-and-state-tax-r...
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