How Long to Save a Deceased Parent's Tax Returns

Different final filings determine time to keep records.

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The Internal Revenue Service statute of limitations for an audit is three years. In some specific instances it can be longer. Financial experts suggest that records be held for an additional two to three years in case there are questions about the deceased’s final return.

Proof of Income and Expenses

Keep proof of income and expenses for the same time you keep the tax return. For income, this includes W-2s, 1099s, bank or brokerage statements and K-1s. Keep proof of payments for any expenses claimed as a deduction on the tax return such as medical bills, charitable donations and real estate taxes.

Proof of Payment

Keep proof of payment of deductible expenses, such as cancelled checks, credit card statements, sales slips and receipts, for the same period as you keep the tax returns.

Period of Limitations

The IRS defines several periods of limitations that define how long you need to keep the tax return. If you did not report income your parent received that you should have, and it is more than 25 percent of the gross income shown on the return, the IRS can look back 6 years. If the return that was filed had fraudulent information or a final return was not filed, there is no limit on the number of years the IRS can look at past returns. If none of the above applies and additional tax is owed, the period of limitation is 3 years. For a return that claimed a loss on worthless securities, the period of limitation is 7 years and for returns where a refund or credit is filed after the original return was filed, the limitation is 2 years after the tax was first paid, or 3 years, whichever is longer.

Non-Tax Purposes

While you may not need to keep the returns for tax purposes, do not discard them until you are confident they will not be needed for another purpose such as by a creditor or for insurance reasons.