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How Long Should You Keep Financial Records

In the US, your tax returns shuld be kept indefinitely. In general, the supporting documentation needs to be kept for at least three years from the date of filing, or the return due date, whichever is longer.

Returns can still be examined for up to 7 years if income that has been underreported by more than 25%, but without good records, how can you show that it has not been underreported, so it is safer to keep your records for the full 7 years.

If you have records establishing a basis in stocks or property which you will use to reduce your gains, then you need to keep these records for the appropriate number of years from the due date or filing date of the return in which applied that basis. Similarly, if you carry forward losses, you need to maintain the records for the approrpiate number of years from the return in which you apply those carried over losses. For years in which you can roll over gains into a new asset, the documentation from the sold asset must be maintained as if they pertained to the new asset.

In addition to the periods that you keep records for tax purposes, you will want to keep receipts or bills for purchases at least as long as you have the item, as they may be useful for insurance purposes, or to establish your date of purchase for warranty repairs, etc.