03/03/2026
GENERAL PRINCIPLES FOR TAX RECORD RETENTION
📅 Important Timeframes for Keeping Tax Records
1️⃣ Standard Rule
👉 Keep records for at least 4 years
Because:
• IRS: 3 years from the date you file the return
• California FTB: 4 years
👉 For safety, it is recommended to keep records for a minimum of 4 years.
2️⃣ Claiming a Refund or Tax Credit
Keep records for 3 years from the date you filed the return or 2 years from the date you paid the tax, whichever is later.
3️⃣ Worthless Securities or Bad Debt Loss
Keep records for 7 years.
4️⃣ Underreporting More Than 25% of Gross Income
If you underreport more than 25% of your total income, the statute of limitations extends to 6 years.
Therefore, you should keep records for at least 6 years.
5️⃣ Failure to File a Tax Return
If you do not file a tax return for a given year, the IRS may audit you with no time limit → you should keep records indefinitely.
6️⃣ Fraudulent Tax Return
If a return is fraudulent, the IRS has the right to audit at any time (no statute of limitations).
7️⃣ Employment Tax Records
Keep records for at least 4 years from the date the tax becomes due or the date the tax is paid, whichever is later.
⸻
🏠 Property Records
For property (rental homes, machinery, equipment, business vehicles, etc.):
• Keep records until you sell or dispose of the property
• Then continue to keep them for at least 3 years after the year of sale
Reason: You need these records to calculate basis, depreciation, and gain or loss when selling the property.
⸻
📝 Additional Notes
• Always keep a copy of your filed tax returns.
• Some records may need to be kept longer for non-tax reasons (banking, insurance, legal purposes, etc.).
———————————————————————
TDT Financial & Tax Solutions
Duong Nguyen, EA— LIC # 148909
🕹️Address: 16155 Brookhurst St, Fountain Valley
☎️Phone: 949-438-2426
📩Email: [email protected]
