||Record Keeping for Taxes
What to Keep and How Long
|Tax records should be kept on a year-round basis, not hastily assembled just for your annual tax appointment. Without tax records, you can lose valuable deductions by forgetting them on your tax return, or you may have unsubstantiated items disallowed if you are audited.
Generally, returns can be audited for up to three years after filing. However, the IRS may audit for up to six years if there is substantial unreported income. The three and six year limits start with the filing of a tax return; if no return is filed, the time limit never starts to run.
Which records are important?
How long should records be kept?
Just how long you should keep records is partly a matter of judgment and a combination of state and federal statutes of limitations. Federal tax returns can be audited for up to three years after filing (six years if underreported income is involved). It is a good idea to keep most records for six years after the return filing date.
We have a brochure available that lists recommended retention periods for various items, Contact us to obtain your copy.
If you are in business, your record requirements are more extensive. Please call us; we will be happy to assist you with a system of record retention.