Most people know that it is important to keep track of the documents that they will use to fill out their tax returns. Once the tax return is filed, however, most are unfamiliar with how long they need to keep those records. If you are audited by the IRS, you will be required to produce certain records to support your tax claims.
According to the IRS website, the length of time you need to keep a document depends on the type of document it is. As a general rule, the IRS recommends that taxpayers keep documentation until the “period of limitations” runs out for that year’s return. The period of limitations refers to the time period in which you may still amend your tax return or the IRS may assess additional taxes.
Some more specific guidelines for how long to keep tax returns and supporting documents include:
- You should keep copies of your filed returns indefinitely, for your own records and to help you fill out subsequent year’s tax forms
- However, if you did not owe an additional tax and you have filed properly, you really only need to keep tax records for three years
- If you did not report income, filed a fraudulent return, or did not file a return for a certain year, keep the records indefinitely
- If you claim a credit or refund after you file your original return, keep all of the records for three years from the date the original return was filed
- If you claimed a loss on bad debt or securities, keep the records for seven years
- If the records relate to property you own, you need to keep them until the period of limitations expires for the tax year in which you dispose of the property
You also need to keep in mind that insurance companies, creditors and other parties may require you to keep records longer than the IRS does. Check with a qualified accountant to be sure.
At The Pew Law Center, PLLC, we understand that if you do run into tax problems with the IRS, it can be overwhelming. Whether you owe back taxes, haven’t filed taxes for several years, or have received an audit or wage garnishment notice from the IRS, the attorneys at The Pew Law Center, PLLC can help you or your business with these and any other federal and state tax problems.
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