How Long Should You Store Tax Records?

Wondering what you should keep and what you can toss for tax records this year?

Check out this terrific article from Hyland, Rutherford, and Garbett, CPAs, LLC on Tax Records Retention Policies:

Make 2014 the year you “Go Digital” with your tax records!

  • Scan incoming documents with a high-quality scanner.
  • Store the digital files in a secure, organized electronic document management system, either on your network or in a secure cloud-hosted application, (like our eBizCloud©)
  • Set appropriate records retention policies on the folders and documents, and use these systems to regularly purge outdated records.
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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:

(Note:  clicking the links below will redirect you to www.hrgcpas.com):
Business Records
To Keep
Personal Records
To Keep
1 Year 1 Year
3 Years 3 Years
6 Years 6 Years
Forever Forever

You can view the rest of Hyland, Ruddy and Garbett’s Records Retention Guide at:  www.hrgcpas.com/taxretention.php

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