How long should I keep my tax records?
Discarding tax records too soon can be costly.

The length of time you should keep a document depends on the action, expense, or event the document records. 

Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out.

Period of Limitations that applies to income tax returns

1. You owe additional tax and situations (2), (3), and (4), below, do not apply to you; keep records for 3 years (NM: Dec. 31 of the 3rd year). 

2. You do not report income that you should report, and it is more than 25% of the gross income shown on 3. your return; keep records for 6 years (NM: Dec. 31 of the 7th year). 

3. You file a fraudulent income tax return; keep records indefinitely

4. You do not file a return; keep records indefinitely. 

5. You file a claim for credit or refund after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
 
6. Your claim is due to a bad debt deduction; keep records for 7 years

7. Your claim is due to a loss from worthless securities; keep records for 7 years

8. Keep information on capital assets (see below) or the life of the assets & after, even when you dispose of the asset; keep records indefinitely.

9. Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
The following questions should be asked about each record as you decide whether to keep a document or throw it away.

Are the records connected to assets?

Keep records relating to investments, real estate, business equipment & vehicles used in business & other capital assets until the period of limitations expires for the year in which you dispose of the property in a taxable transaction.  You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

If you received property in a nontaxable exchange, you must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

What should I do with my records for non-tax purposes?

When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.

IRS Resource: How long should I keep records.