Posted on 10/21/2017 2:24:37 PM PDT by Cementjungle
My accountant says 7 years for everything to do with my business. 4 years for most things, but 7 years to be safe.
I guess it would matter how large the estate was, and how complicated.
My mother in law is 95. She has nothing.
When she dies it all goes in the dumpster the next day. Well, not her. We will put her somewhere nice. But if the IRS wants to chase her taxes down, I will be happy to direct them to the landfill.
Keep no tax records beyond 7 years unless required by law (unlikely). As always, consult an attorney for legal advice.
You’ve peaked my curiosity...who was your MIL or, what did she do that is Smithsonian. I am genuinely curious. My daughter is an artist and she has had ceramic pieces given to her over the years that are now worth thousands apiece ( I know...it’s a bowl!)
Her taxes might be a cool thing to hold onto, or at least archive somewhere.
Save everything seven years old and younger. Scan to PDF, save the PDFs on a flash drive. Make a copy of the flash drive for safe keeping.
Most modern PC printers can make PDFs from a scan.
My m-i-l passed away two years ago and we had the exact same situation.
We kept tax records back 7 years but bank statements and utility bills and stuff from the 90’s we shredded.
Be especially careful about SS numbers appearing on papers.
I had to go through everything a piece at a time because there was important stuff mixed in with the junk. It took a week of non-stop just to sort the “maybe” keep from outright junk.
Then we had to go theough a second time and make the final decision.
But since the IRS allegedly can only go back 7 years, that was our benchmark for most stuff.
I think the actual tax returns though, we did 10 just to be safe.
Not exactly professional advice but that is what we did, FWIW.
If you suspect fraud, then shred immediately. If not, 3 years from date filed. If you want to travel light, only keep records no one else has. For example, banks and credit card statements can be received from banks. No need to keep.
Make certain before you discard anything that there are no unclaimed credits on your parent’s tax accounts. Sometimes older people have a credit elect or estimated payments made to the next tax year. Their record keeping might not be very good and the estate might not be aware of them. The taxes are filed and processed and they money just sits there.
It might be several years before the IRS starts to send letters. If it has not been changed, the letters may go to the address of the deceased and might not get forwarded to the estate. You generally have 3 years to submit a claim for their refund and will probably not get it back after that time.
My dad left us with about 65 years of returns. We kept them long enough to shred them the day we found them.
Well, it's been six years since she passed, and the estate return did get audited (which resulted in a reduction in valuation and the IRS sent us back $124K in over-payment). To conclude the audit, both us and the IRS signed a letter stating that that forever settled her estate as far as the IRS was concerned.
So at this point, all I'm concerned with is all her past personal returns. I suspect the chance of them causing trouble at this point is pretty slim, but who knows.
Yes, but what about limited partnerships? Anyone care to comment? I am still holding onto papers dating back to partnerships closed 12+ years ago.
So if you have it, it can be “discover able” in a lawsuit, so don’t hold anything you do not NEED.
The IRS says that they can go back 7 years so I am of the opinion that you NEED to keep the last 7 years.
I would hang on to the audit determination and agreement and the last year return to show it was settled. It sounds like you can pitch the rest.
As regards ones own returns, it never hurts to hold copies of page 1 and 2 of your signed Form 1040 beginning with your first year working in case you ever need to challenge SSA about your earnings record.
Thank you!
I just needed permission to dump all these papers...
Yea, I think I have most of my own tax returns... and I have some statements from the SSA which show my history of earnings/contributions.
“added value to our house. That way the capital gain for our sale price over our investment is lessened by the proof of the improvements we made.”
That’s not necessary anymore——it’s $500.000.00 in your favor for a couple if it’s the primary residence——not a single receipt needed.
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Oh, hold the last bill showing that Doctors, hospitals, credit cards and utilities bills were paid off for 7 years in case some debt collector comes back and tries to claim that something was not paid. Pitch the rest.
Well, a bill collector's not going to have much luck squeezing money out of my MIL at this point. If they have to trash her credit rating, then so be it.
Well, its just general advice rather than your mother’s estate in particular.
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