The main record to keep is your Form 1040, along with attached schedules and forms, because it shows that you fulfilled your tax-filing obligation and it can be handy for future reference.
Keep records of all sources of income, including wage statements, investment earnings statements, and retirement account statements.
Keep records of tax-deductible expenses, including itemized deductions such as medical expenses, charitable contributions, mortgage interest, and state and local taxes, as well as above-the-line deductions and tax credits, and business expenses if you are self-employed.
Keep residential records, such as records of property improvements, to help minimize tax consequences when you eventually sell your home.
There is no preferred way to keep tax records, but it’s recommended to retain any material that can help you answer follow-up questions from the IRS. If you store the records digitally, keep in mind that some storage formats may become obsolete (e.g., few computers can read floppy disks anymore), some formats are subject to decay after several years, and local copies are best backed-up remotely or in the cloud.
The length of time to keep tax records varies depending on the type of document, but it’s generally recommended to keep tax records for at least three years afer the date of filing. Additionally, if the tax return or the documentation pertains to the purchase of investments, homes, or business assets, or reinvestment of dividends, keep the documentation until three years after the sale of the asset.
Kenneth Athon Tax Strategies 