To Keep or Not to Keep? That is Question!
T-shirts and Calculators Blog: To Keep or Not to Keep? That is Question!
by Saima Uribe
With tax season upon us, did you ever wonder exactly how long you have to hold onto your old tax returns and supporting documents? The answer, in general, is three years. The IRS will only go back and audit your returns for the previous three years of filed returns. Whether electronic or hard copy, you should hold on to these documents for at least that long. Personally, I would still hold on to the main pages of the tax return and toss the supporting documents in case you need them for loans, creditors, or other insurance purposes.
Some other types of documents that should be kept are items substantiating income, tax deductions and credits, or write offs that were made; these all stand as documents of proof if you are ever audited or if you need to amend a return. Healthcare information statements should also be kept with the tax records. These consist of employer-provided coverage, premiums paid, advance payments of the premium tax credit received, and type of coverage. These should not be sent into the IRS as proof for health coverage, but rather kept as references for the taxpayer.
A few more important things to keep in mind – a return that is older than three years that has not been filed can still be audited, so make sure you always file a return if it’s required. Also, real estate records related to the disposing of the property should be kept for up to seven years.
Finally, if you are going through old returns and records, always remember to dispose of important documents properly. Identity theft happens all too often and properly disposing of documents is one easy way to prevent it from happening.
Happy tax season! And remember, if you need help we at Joshua Lance CPA, LLC are here to help!