Considerations For Old Tax Documents
July 9, 2025
That stack of paperwork collecting dust in your home office? You’re not alone. Many of us have a drawer, box, or corner filled with old financial records. With tax season coming to an end, you may wonder: When can I safely throw away my old tax documents?
Managing tax paperwork doesn’t have to be hard. You just need to know what to keep and what to throw away. It’s also important to know when it’s safe to discard items. Here is a clear look at what to save, how long to keep it, and smart ways to store it.
First Things First: What Counts as a Tax Document?
Before diving into timelines, it's important to understand what falls under the category of "tax documents." Depending on your employment situation, financial activity, and benefits received, you may receive various forms during tax season. Here are some of the most common:
● W-2: Reflects income earned through traditional employment.
● 1099 Forms: These come in different varieties—1099-INT for interest income, 1099-DIV for dividends, 1099-MISC or 1099-NEC for freelance or contract work, and 1099-B for brokerage transactions.
● 1098 Forms: Detail mortgage interest or student loan interest you’ve paid.
● 1095-A: For those who bought health insurance through the marketplace.
● Social Security or unemployment income statements: If you received benefits, you'll get documents showing that income.
Beyond tax forms, you may also need to retain other types of records like:
● Receipts for deductible expenses
● Bank statements
● Property purchase and loan documents
● Investment statements
● Health savings account (HSA) contributions and distributions
“These documents help paint the full picture for your tax filing and may be necessary if you’re ever audited,” explains Christian Maldonado, CEO of Finsult, an accounting firm.
How Long Should You Keep Tax Documents?
According to most tax professionals, the general rule of thumb is seven years.
Romeo Razi, a CPA and former IRS agent, advises keeping your tax records for at least that long because the IRS usually has up to three years to audit your return. However, under certain circumstances—like underreported income—they can go back six years or more. That’s why many financial advisors recommend a full seven-year retention window to stay on the safe side.
But not everything should be discarded after seven years.
“If you’ve made significant purchases, especially involving real estate or large assets, keep those records indefinitely—or at least until you sell the asset and no longer need the documentation for tax purposes,” says Razi. “These records serve as proof of original value, which is crucial for calculating capital gains and depreciation.”
This is especially important in non-disclosure states like Texas, Utah, and Montana. In these states, real estate prices are not made public. Without records, proving what you paid for a property years ago could be difficult if the IRS comes asking.
Going Digital: A Smarter Way to Store
If storing seven years of paper makes your filing cabinet full, there’s good news: digital copies are fine.
“The IRS allows electronic storage of tax documents as long as the images are legible and accessible,” says Roxanne Hendrix, CPA and tax expert with JustAnswer. “Scan your paperwork and back it up using encrypted cloud storage or an external hard drive.”
Digital records can make document retrieval easier and reduce the risk of loss or damage due to fire, flood, or misplacement. Just be sure to label and organize files clearly, and use secure methods of storage to protect sensitive information.
Protect Your Paperwork While You Have It
Until you're ready to shred, store your tax documents safely. This means keeping them away from prying eyes, thieves, or curious kids. A locked filing cabinet, safe, or password-protected digital storage system are all smart options. You can also consider entrusting your accountant with important records if you work with a financial professional year-round.
Tax paperwork often contains Social Security numbers, financial account information, and other sensitive data. Throwing these in the trash without proper shredding or deletion opens you up to identity theft—so never toss tax records without first ensuring they're destroyed securely.
When It’s Finally Time to Shred
Once the seven-year mark has passed from the date you filed, and you're confident that no audits or other disputes are pending, you can safely dispose of your tax records. For most people, this means that old W-2s and 1099s from seven or more years ago can be shredded.
Keep in mind: the fewer assets you’ve acquired and sold, the simpler your tax record needs will be. If you haven’t bought a house, started a business, or invested heavily, your long-term document retention may be minimal.
Final Thoughts
Tax paperwork doesn’t need to rule your storage space. With a little organization and a clear strategy, you can know exactly what to keep, what to digitize, and when to let go. Follow the seven-year rule, hold onto key asset-related documents longer, and when the time is right—break out the shredder with confidence.
Sources:
https://www.thepennyhoarder.com/taxes/get-rid-of-tax-documents/
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.