The length of time you should keep your receipts depends on the statute of limitations for the item which the receipt is supporting on your income tax return. Generally, the guidelines for which receipts should be kept and for how long, are fairly straightforward.
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It is important to maintain receipts as they support credits, deductions, losses and other items on your income tax return.
It is important to maintain receipts for so long as they may be useful. In most cases, you should maintain a copy of your receipts for at least as long as the statute of limitations allows. This is the period during which the Internal Revenue Service may contact you and require that you produce receipts to substantiate items listed on your return. The statute for assessment of additional tax and audit is three years. Most taxpayers should maintain their receipts for at least this three-year period.
The three-year statute of limitation does not apply to cases of fraud. In addition, if you under report your gross income by 25 per cent or more on your return, then you should keep all receipts relating to that return for at least six years as the statute of limitations is extended.
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