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Last Updated: 3/6/2012

Recordkeeping for Income Tax Purposes

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Individual Income Tax

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​After you file, be sure to keep copies of your tax return and related records in case there are questions about your return, how much tax you owe or the amount of your refund.

Why should I maintain tax records?

  • Keeping records of your income and deductions will help you prepare an accurate tax return and pay the correct tax.
  • You must be able to prove all items on your return with adequate records or sufficient evidence.
  • Accurate records will help you if the department selects your return for examination. If you’ve kept good records, you can clear up any questionable items and easily arrive at the correct tax.

What records should I keep?

You should keep copies of your tax returns, tax credit claims and supporting documentation. The list below includes some of the tax records you should maintain: 

  • Income: Keep Forms W-2 (wage statements), Forms 1099, financial statements, bank statements, contracts and other documents to verify income reported on your returns.
  • Deductions and Credits: Keep canceled checks, bank statements, paid invoices, sales receipts, Forms 1098 (mortgage interest), loan documents, financial and legal documents, mileage logs, appointment books, credit card statements, and other documents to verify expenses and credits claimed on your returns.
      • If you deduct gambling losses on your federal tax return, you must be able to prove the amount of losses by receipts, diaries and/or statements. See Taxation of Minnesota Gambling Winnings.
      • If you claim the K-12 Education subtraction or credit, you must save your itemized receipts, invoices and other documentation for all qualified expenses. 
      • If you claim the Child and Dependent Care Credit, you must save canceled checks and/or keep a detailed record of your payments for child and dependent care expenses.

How long should I keep tax records?

In general, you should keep copies of your tax returns, other forms and related records for at least as long as the period of limitations. (This is the time during which the department may audit your return, assess tax or bring legal action.)

For individual income tax returns, tax credits and property tax refunds, the period of limitations is generally 3 ½ years from the due date of the return or the date it was filed (whichever is later).

There are certain records you should keep for longer periods, including:

  • Records relating to the basis of property, which you should keep for the period of limitations that applies to the income tax return of the year in which you sold or disposed of the property. If you exchanged the property for other property, the first property’s records become part of the basis records for the new property and you should maintain them accordingly.
  • You should keep records longer if you’ll need them to complete a future return, such as when the records have information related to bonus depreciation, Section 179 expensing or a net operating loss carryback.

Note: While the period of limitations for individual income tax returns is 3 ½ years, the Department of Revenue does not retain copies of your returns indefinitely. Therefore, you may want to keep copies of tax returns with underlying documentation (receipts and checks) for at least six years, and keep copies of your W-2s forever (as a record of Social Security payments).