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You have questions, we have answers.
The following are just a few of the hundreds of questions we answer every year.
If you don't see your favorite listed below, please feel free to give us a call and ask!
*** This list of frequently asked questions is designed to give simplified general tax and business strategies advice. Your specific situation may vary or have exceptions that would apply, and we recommend that you contact us or an independent tax advisor to obtain the full tax law regulations and exceptions that may pertain to your specific circumstances. ***
Storing tax records: How long is long enough?
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.
Caution: Identity theft is a serious threat in today's world, and it is important to take every precaution to avoid it. After it is no longer necessary to retain your tax records, financial statements, or any other documents with your personal information, you must dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.
Documents to Keep For ONE Year
Documents to Keep For THREE Years
Documents to Keep For SIX Years
Documents to keep for FOREVER
While federal guidelines do not require you to keep tax records "forever," in many cases there will be other reasons you'll want to retain these documents indefinitely.
Personal
Documents to Keep For ONE Year
Documents to Keep For THREE Years
Documents to Keep For SIX Years
Documents to keep for FOREVER
Special Circumstances
· Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)
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