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After a Death: How Long Should You Hold Onto Tax Returns?

After the death of a loved one, there are many questions to be answered, such as "how long should I hold onto their tax returns?" Get the answer here.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

Processing the death of a loved one is incredibly tough. Not only are you undergoing the grieving process of your loss, chances are, you might also be the person responsible for settling their estate. Here, there are many questions that will come up as you begin to sort through their belongings. For example, you will find where they stored their documents and need to know how long to keep tax returns for. While it’s better to be safe than sorry, it isn’t always practical to hold on to every single item you find. This guide will answer your pertinent question of how long you should keep the tax returns of a loved one who passed away.

How Long to Keep Tax Returns After Death of a Loved One?

We generally recommend that you keep tax records for seven years after the passing of a loved one. The Internal Revenue Service can audit your loved ones for up to three years after their death. This is called a statute of limitations. However, this time period can be longer for more serious offenses. In the case of an audit, you’ll be required to provide all of the tax documentation demanded by the IRS.

You should also keep tax records long term in case of fraud. Scammers often target the identities of recently deceased. It is a fraudulent method of opening credit cards or lines of credit without having someone notice for a long period of time. Retaining your loved one’s tax records can prove helpful in case evidence is needed in case fraud occurs.

Last but not least, tax returns are important documentation to keep for the purpose of settling your deceased loved one’s estate. You’ll need them when filing their final tax return, addressing their student loan debt, probate, and other important aspects of estate settlement.

Note that tax returns aren’t the only tax records you should keep. Next we’ll provide a list of other tax-related documents that should be retained.

Types of Tax Records to Keep

In addition to your deceased loved one’s tax returns, you should also be careful to retain other important tax records:

Personal Tax Records

  • Form W-2

  • Form 1099s

  • Form 1098

  • Receipts from charitable giving

  • Health and college savings plans

  • Retirement savings plans 

  • Property tax bills

  • Property documents

  • Estate documents

  • Asset records

Business Tax Records

  • Form 1099s (self-employment)

  • Bank statements

  • Investment statements

  • Payroll data

  • Canceled or voided checks

  • Tax returns

  • Business loans

Commonly Asked Questions About How Long to Keep Tax Records

This next section will address some commonly asked questions about how long to keep tax records.

Should I keep my 20 year old tax returns?

No, there is no need to keep tax returns that are 20 years old. According to the Internal Revenue Service website, the longest recommended period of time to retain tax records is seven years. This is the recommended time if you plan to file a claim for a loss from bad debt reduction or worthless securities. In most cases, you only need to keep tax returns for three years. 

How long do you need to keep tax returns according to the IRS?

According to the IRS, taxpayers should keep their tax returns and related documentation for at least three years from the date of filing their taxes. The IRS statute of limitations expires after this case, which means they can no longer perform an audit. 

However, there is a caveat. If you under-report income by 25 percent, the IRS can audit you for six years from the date of filing, or seven years if you claim a loss for bad debt or worthless securities as mentioned above. 

If you evaded your taxes or knowingly filed a fraudulent return, then you should keep your records indefinitely. The IRS has no statute of limitations in this case. 

Make Your Tax Returns Easy to Find with Trust & Will

Tax returns or critically important documents to retain, even after death. They may be needed in a wide array of scenarios, such as for estate settlement, probate, or even responding to fraud or IRS audits. For these reasons, knowing how long to keep tax returns is important. 

In most cases, the statute of limitations for the IRS to perform an audit is three years. This should be thought of as the minimum timeframe to retain tax records. However, in more serious  cases, an IRS can perform an audit for as far back as six to seven years. This falls in line of our general recommendation to retain important financial documentation for a range of three to seven years for a deceased loved one, seven if you want to play it safe. 

Be sure to store these documents in a secure space, such as a safe, as well as store digital backups. This process might also inspire you to get your affairs in order and organize your documents for your own loved ones. You can create a digital estate plan and store it alongside critical documents related to your estate for safekeeping. Trust & Will members have the convenience of storing their estate planning and related documents, including tax returns, in our digital vault that offers bank-level encryption. Find out more about our membership here

Is there a question here we didn’t answer? Reach out to us today or Chat with a live member support representative!

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