October 9, 2017|
C: Hi everyone, I am Cassie Porter,
K: And I am Kelly Hurd. We are senior accountants here at Faw Casson.
C: We want to talk to you today about how long you should keep you tax documents. If you’re like me as soon as your tax return is filed the last thing you want to do is hang on to all those tax forms and schedules, but do you know how long you really should hang on to them? Tax records should be kept for a minimum period of three years after the tax return is filed. To take a conservative approach 7 years is a good rule of thumb but they may end up needing to be retained forever.
K: It’s crucial to keep all documents related to a tax return (all the way down to the individual receipts) on the off chance you are audited. The IRS will require you to prove you were entitled to the deduction and you want to have all the proof you need.
K: There’s one particular instance aside from the ones mentioned above that you will need to retain your tax records for longer than three years. For example, what if you have tax records related to a property you purchased or received? You would want to keep those records until the period of limitations expires for the year you dispose of the property. In this case tax records can mean anything from receipts for property taxes paid, interest on a mortgage, repairs made, etc. Keeping these records can make calculating any gain or loss you may have on the property a lot simpler.
C: In today’s technology many individuals and businesses rely on the cloud or other internet storage to store documents. If you need to add some storage space in your desk drawer or your filing cabinet it may be beneficial to look into scanning your records into the cloud.