FINANCIAL RECORDS YOU SHOULD KEEP AND FOR HOW LONG

| May 26, 2014 | 0 Comments

Summer is the time that most of us clean out our closets and all that paper that has accumulated over the years.  Many have called to ask “How Long Do I Need To Keep My Tax Records?”  Unfortunately, there is no ONE answer to this question.

The main reason we keep our tax records (returns and supporting documents) is so we can address any issues that the IRS may have.  Usually, the IRS only has three years after a return is filed to audit the records.  DON’t throw away your records IF you have some concern about being vulnerable to an audit.  If the IRS suspects that you underreported income by 25% or more, they can audit your returns going back six years.  If the agency believes you committed FRAUD, they can go back as far as they want to prove the existence of FRAUD.

Some tax information  such as weekly pay stubs and information that is produced monthly can be destroyed if you have annual statements.  It is important to keep records of assets that can grow in value UNTIL you sell the asset.  Keep records of major upgrades or additions which can help establish the value of the property.

If you have a business and/or have employees, the IRS requires that you keep employment tax records for at least four years from the time the tax was due or paid.

I hope this helps when you are facing a pile of paper from years past.  If you have precise questions, please call.

 

 

 

 

Filed Under: financial planning, taxes

Comments are closed.