Almost a color for each month of the year......
Posted on 03/02/2024 10:37:07 PM PST by where's_the_Outrage?
Take it from someone who has a hoard of legal accordion files stashed away in a hope chest: It’s a good idea to keep your tax records. However, if you’re going through a phase of trying to get rid of everything, the IRS is (sort of) clear on how many years to keep the paper trail.
How Long To Keep Your Tax Records
Let’s go in descending order:
Forever: If you never filed a return, or if you filed a fraudulent return (neither of which is recommended)
7 years: If you file a claim for a loss from worthless securities or bad debt deduction
6 years: If you do not report income that you should report, and it is more than 25% of the gross income shown on your return
4 years: For all employment tax records (W-2, 1099, etc.) 3 years: If none of the above situations apply, or if you got a credit or refund when you filed That’s a lot to think about, though.
If you’re like most people, you should plan to “save all your receipts for four years, and save a copy of your tax return for seven years,” said Rus Garofalo, founder of Brass Taxes.
In short, the IRS has three years from the date you filed to come say, “Show me all your receipts!”
(Excerpt) Read more at msn.com ...
Right now, that would be 2022 (what would be considered current), 2021, 2020, 2019 (first 3) and 2018, 2017 and 2016 (second set of 3). The filing extension deadline is October 15, so on October 16 you need to keep 2023 (which would then be considered current). 2022, 2021, 2020, 2019, 2018, and 2017.
Along the same lines, if you discover an error in an already filed return that would produce a refund to you, you can file an extension to claim the refund for the current year plus 3. On the other hand, if the IRS discovers a problem in your filed returns that creates a tax liability, they can go back 6 years. Why? Because it's tax law.
I keep 7 years worth of returns on my computer/back up and also store hard copies in a file cabinet - each year I toss the contents of the oldest folder and replace it with the new returns.
I and my tax accounting service BOTH keep ALL information used to file my taxes, DIGITALLY.
I have records going back into the 90’s !
I personally have them backed up in several places (including off-site).
Interestingly, a couple years ago I needed to file an “amended” return and send a check for the difference.
The IRS never deposited that check!
But a year later sent me a letter demanding that money (with interest).
My tax advisor took care of this for me. They had sent my amended return certified receipt mail and had a copy of the check they included.
Finally, the IRS relented their demand, since they could not prove I had not already paid.
Maybe some day they will find that check and try to deposit it? I keep enough in checking, just in case!
I had a habit of just keeping them forever. Recently we were moving and I found some returns from the 70’s. You think taxes are high now? In ‘78 I made about $27k, a good salary, and my total tax including Social Security was over $14k.
I have all records since 1991…Why?…they came in handy when I was going through the Fed security clearance process, ( try filling out Fed form 86 without records) when that FBI agent agent finally got around to interviewing me at my home, I had more supporting evidence of my history than he did….and he had a whole briefcase full…not so with my past wife…it was put on hold until her parents could be interviewed at a US Embassy 6,000 miles away.
Almost a color for each month of the year......
Eight-and-one-half inches.
Except for the tax returns themselves (electronic) and a few supporting documents (property records; check registers), I shred and dispose of everything else precisely three years from the filing date.
I always kept them for 7 years for personal and my business.
I have every return from the first one I filed in 1966 until 2022. Soon, 2023 will join the pile.
My dad had that back to the 70’s, and upon his death I had to go thru them all because he hid money in files, what I mess. I pleaded with him to get rid of those old files before he passed.
In my case I moved out of the country in 2011 and really had to downsize my files, so I got rid of as many files as I could and digitized a lot of them. Luckily I have these backed up.
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