It's one of the questions we hear most often, usually right after someone learns they took the standard deduction last year. If the standard deduction was bigger than your itemized deductions, your receipts for mortgage interest and charitable gifts didn't change your federal tax bill. So why keep holding on to them?
Your situation can change from one year to the next
A new home, a large medical bill, or an unusually generous year of giving can push your itemized deductions past the standard deduction. If you haven't kept the records, there's no way to know, and you could end up paying more than you need to.
Some expenses aren't itemized deductions at all
If you're self-employed or own rental property, your business and rental expenses are deducted on their own schedules whether or not you itemize. Those records always matter. The same goes for education expenses, childcare costs, and health savings account contributions, which can affect credits and adjustments that have nothing to do with itemizing.
Records protect you if the IRS has questions
If your return is ever questioned, it's up to you to support what you reported. The IRS generally has three years from the date you file to examine a return, and longer in certain situations, so keep your tax records for at least that long.
For property you own, like a home or investments, keep the purchase and improvement records for as long as you own it and for several years after you sell. Those records determine how much of the sale is taxable.
Our advice
Keep one simple folder, paper or digital, for anything that might be tax-related, and bring the whole thing to us. Let us sort out what matters. That's our job, and we'd much rather see one receipt too many than miss a deduction you were entitled to.
Have a question about your own situation?
General guides can only go so far. We're happy to look at the details and tell you what applies to you.