I am cleaning up files and want to know what are the most important tax document that I need to keep?

[DoninGA]

You should keep your federal and state income tax returns for a minimum of three years after the filing date of the tax returns.

See this IRS website for document retention - https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

[Opus 17]

You should keep your main tax returns and any supporting documents, such as proof of charity donations, medical expenses, and mortgage interest and property taxes, for at least three years. However, some states can audit you for four years, and there are some situations where the IRS can audit you up to six years after filing a tax return, so you might want to save your tax returns for six or seven years.

There are some additional special circumstances where you should save documents longer.  If you own your home, you should save proof of your purchase price, closing costs, and expenses for improvements for as long as you own the home plus 3 years after you sell. Documenting the cost of your home and the cost of improvements will reduce your capital gains tax when you sell. 

If you have other property or investments that are not held with a stockbroker, such as  coins or collectibles, you should also keep records of the purchase price for as long as you own the item plus 3 years after you sell, also so you can calculate the correct capital gains.  (Brokers will usually keep track of the cost basis of investments they hold for you.)

If you make nondeductible contributions to a traditional IRA, your tax return will generate a form 8606. For every year that you make additional nondeductible contributions to your IRA or that you withdraw money from your IRA (if it contains nondeductible contributions), your tax return will generate a new form 8606, and you need the prior form 8606 to do that.  So you need to keep your most recent form 8606 forever, or until you need it for a new return, at which point your new 8606 becomes your most recent form 8606, and you should keep that forever or until you need it to file a new return.  Losing track of your form 8606 can result in you paying income tax when you withdraw the nondeductible part of your IRA that you already paid tax on.

If you own a Roth IRA, you should keep records of your contributions and conversions until you turn age 60.  If you ever need to withdraw from the Roth IRA before age 59 1/2, you will need to know how much your contributions and conversions were because that will affect any tax or penalties you might have to pay. After age 59 1/2, the mix of contributions, conversions and earnings no long affects how you are taxed.

I’m sure there are a couple of other weird uncommon situations but I can’t think of any more at the moment.  Maybe another expert will have some ideas.

[rjs]

Here are a few more situations where you need old tax records. I don't consider these weird.

If you have assets on which you are claiming depreciation, you should save all the tax returns that show depreciation until three years after you file the return that reports the disposition of the asset. (This is mentioned on the IRS page that DoninGA referenced above.)

If you get a lump-sum payment of Social Security benefits for prior years, you will want to have your tax return for every prior year for which you got a lump-sum payment. It's common for lump-sum payments to go back 2 or 3 years prior to the current year, but it could be longer. Lump-sum Social Security payments are typically for disability, and the number of years depends on how long it took to get a final determination of disability. So if you apply for Social Security disability benefits, start saving all your tax returns until you have received payment of any back benefits. The same is true if, for some reason, there is a delay in receiving Social Security retirement benefits, though this is less common. If you use the lump-sum election, you will then have to save all those prior-year returns for 3 years after you file the return with the lump-sum election.

If you claimed the first-time homebuyer credit in 2008, you should probably keep your tax returns for all the years from 2008 through the year that the credit is fully repaid (which could be as late as 2024), and keep them for 3 years after you file the return with the final repayment.