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Record-keeping for Income Tax Purposes
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After you file, keep copies of your tax return and related records. The Minnesota Department of Revenue may have questions about your return, your tax owed, or your refund amount.
Keeping records of your income and deductions will help you:
- Prepare an accurate tax return and pay the correct tax
- Prove all items on your return with sufficient records or evidence
- Clear up questionable items when we review your return
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You should keep copies of your tax returns, tax credit claims, and supporting documentation.
Records for Income
Keep copies of your federal Forms W-2 indefinitely as records of your income and Social Security payments. Also, to verify income reported on your returns, keep copies of:
- Federal Forms 1099
- Financial statements
- Bank statements
- Contracts
Records for Deductions and Credits
Keeps records verifying your deductions and credits claimed. These records may include, but are not limited to:
- Canceled checks
- Itemized receipts
- Bank statements
- Paid invoices
- Sales receipts
- Federal Forms 1098 (for mortgage interest deductions)
- Loan documents
- Financial and legal documents
- Mileage logs
- Appointment books
- Credit card statements
- Receipts, diaries, or statements of gambling losses (for details, see Gambling Winnings)
You should keep copies of your tax returns, other forms, and related records for at least as long as the statute of limitations. We generally have 3 ½ years from the due date of the return or the date it was filed (whichever is later) to review Minnesota income tax returns, tax credits, and property tax refunds.
You should keep records for up to six years if any of these apply:
- We or the IRS audited (changed) your return.
- You amended or will be amending your Minnesota tax returns.
- You need the records to complete a future return. Examples may include reporting bonus depreciation, section 179 expensing, or a net operating loss carryback.
- You have records relating to the basis of property. Keep these records for the period of limitations applying to the income tax return of the year 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. You should maintain these property records accordingly.
Note: While the period of limitations for Minnesota income tax returns is 3 ½ years, we do not retain copies of your returns indefinitely.
