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How long should you save old income tax return information? |
i don't want to get burned in the future, but i don't want to become a pack-rat! As a practicing CPA with over 25 years experience, I understand and have recommended many of the time frames mentioned by other posters. However, my standard answer is now forever. The simple truth is I am continually surprised by the new and different ways that long ago tax records become relevant. And, yes I would pass them down to your children. Remember in this day and age "keeping" them includes digitized records with the appropriate safe guards. I have always been told 5 years, but they can audit you at anytime. You must keep them for a minimum of 3 years from the filing deadline for the return or the actual filing date, whichever is later. Most pros recommend you keep them for at least 7 years. Any item or record that lives longer than that minimum should be kept as long as it is valid. For example, data on the cost of a home and improvements, or cost information for stocks or other investments need to be kept for as long as you own the asset. Also, tax preference items that carry forward from one year to the next, such as capital loss carry forward records need to be kept as long as the tax preference item exists. Finally, Gift Tax returns must be kept virtually forever. This site, http://www.irs.gov/businesses/small/arti... provides Internal Revenue Service guidance on how long records should be kept. Information at this site suggests to keep records for at least three years from the date the return was due. Reasons for longer periods are provided. Richard http://www.answers-for-business.com/... |
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