How Long Should You Keep Your Tax Returns?

Forever.

That may not seem reasonable, but California has no statute of limitations on collections of tax-related debt. That means that 30 years from now you could receive a letter from the state saying, “You didn’t file so pay us $25,000.”

Indeed, during the recent amnesty, California sent several such letters, as detailed in this article. Do you know where your 1984 tax return is?

While the state has four years to challenge anything on the return (the IRS has three; these dates being from due date of the return or date of filing, whichever is later), the Franchise Tax Board is extremely aggressive. Too aggressive. The solution, unfortunately, is to keep everything forever. At least until the law changes.

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