ANSWER: Generally speaking, you should keep your canceled for three years depending on your situation as it relates to the period of limitations. If you have ever fudged a tax return, be prepared to support the return at any time without limitation. More Info: The IRS has three years in which to audit a return. During this time, it is important that you keep all supporting documentation for deductions taken. According to the IRS, you must keep all supporting documentation for all returns until the period of limitations runs out. The period of limitations for a return is determined by that time during which you are allowed to amend the return, or the IRS can assess additional tax. The period of limitations for each return is contingent upon several factors. You owe additional tax: 3 years File a claim for a credit or refund after filing a return: 3 years or 2 years after the tax was paid, whichever is later. Fail to report 25% of income shown on return: 6 years File a loss claim for worthless securities: 7 years Fail to file a return: no limit File a fraudulent return: no limit Property: expires upon disposal of property [...]
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