How long must a contractor keep a copy of their taxes?

A contractor must retain a copy of their taxes for four years as this aligns with IRS regulations, which generally require individuals and businesses to keep tax records for three years from the date the return was filed or due. However, if there is a situation of substantial underreporting (more than 25% of income), the IRS recommends keeping records for six years. However, to cover various compliance and audit scenarios, the four-year period is a commonly accepted standard among contractors in many states, including Nevada. This duration also allows for sufficient time to respond to any inquiries or audits that may arise concerning their tax filings. Maintaining records for this period helps ensure that the contractor can substantiate their income and expenses as necessary.