Storing Tax Records: How Long Is Long Enough?
After April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?
Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.
However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.........
1 Year Business
1 Year Personal
3 Years Business
3 Years Personal
6 Years Business
6 Years Personal
Forever Business
Forever Personal
Paul Dion CPA
IRS: http://tinyurl.com/bcn4h
After April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?
Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.
However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.........
1 Year Business
1 Year Personal
3 Years Business
3 Years Personal
6 Years Business
6 Years Personal
Forever Business
Forever Personal
Paul Dion CPA
IRS: http://tinyurl.com/bcn4h
posted by Milt Baker CPA | 12:11 PM
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