Keep all tax-related records for at least three years. For example, keep your 2015 tax return, filed in early 2016, at the very least until April 15, 2019. This includes not just W-2s but also documentation for itemized deductions such as medical bills, mileage logs, education costs and whatever else you claimed on your tax return. The rule of thumb is, if it is mentioned anywhere on your tax forms, you better have something to back it up.
Statutes of Limitations
The IRS has a three-year window in which it can review your case and assess additional taxes. If you cannot sufficiently support a deduction, the taxman is likely to disqualify it entirely, adding back taxes and potential penalties. Then, there are a few specific situations where you have to save your records even longer. Records supporting your deductions for bad loans and worthless investments must be saved for seven years. Cases in which you have under-reported more than 25% of your gross income must be saved for six years. Fraudulent returns, or if you failed to file a return entirely, have no statute of limitations at all.
In addition to tax records, remember to keep records of your investments. A mutual fund that has been reinvesting the dividends into more shares for 10 years must include the reinvestments into the equation when capital gains are calculated after a sell-off. Do not trust the broker or fund company to keep the records forever; scan and store the annual statements along with your tax returns in a digital vault or on a CD-ROM in a bank safe deposit box.