How long should tax records generally be retained according to IRS guidelines?

The IRS generally advises that tax records should be retained for a period of three years after the date you file your tax return. This timeline is based on the statute of limitations for auditing returns, which allows the IRS to review and assess any discrepancies or errors within that timeframe. Retaining records for three years provides a buffer in case of questions or audits regarding reported income and deductions.

Moreover, there are specific circumstances that could lengthen this retention period, such as if you underreport your income by 25% or more, which may require keeping records for up to six years. However, the standard three-year rule applies to most individuals and tax situations. Keeping records for longer than this time frame, while not mandated, can be prudent for significant transactions, but is generally not necessary for standard tax returns.

Other options, like one year or five years, do not align with the guidelines established by the IRS, and retaining records indefinitely is impractical and unnecessary for most taxpayers.