How Long Should You Keep Those Tax Records After You File?
Tips from Kelly Phillips Erb, forbes.com, April 25, 2016
The Internal Revenue Service (IRS) wants you to hang on to your important records, but you don’t have to keep all of your tax and financial records forever. Here are some tips to help you figure out which records to keep and how long to keep them:
- As a rule, keep your tax records and supporting documentation until the statute of limitations runs for filing returns or filing for refund. For most taxpayers, that means that you’ll want to keep those records for three years following the date of filing or the due date of your tax return, whichever is later.
- If you file a claim for credit or refund after you file your return, you’ll want to keep your records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later.
- If you are a partner or S corporation shareholder, the statute of limitations is generally controlled by the date of your individual return.
- If you file an amended return, it does not extend the statute of limitations for your original return. The clock doesn’t restart: the original date determines the statute of limitations (some exceptions apply if you file within 60 days of the assessment window).
- Don’t forget about those Obamacare requirements. Beginning with the 2014 tax year (the return you filed in 2015), you’ll need to keep records of minimum essential health insurance coverage or proof that you qualified for an exemption or premium tax credit (especially if you had to pay it back).
- If you make nondeductible contributions to a traditional IRA, hold onto those records until you make a complete withdrawal/distribution: you don’t want to pay tax on those twice. But don’t stop there. As a rule of thumb, you should hold onto all IRA records – including Roth contributions – until you withdraw all of the money from the account.
For the full article please visit: http://www.forbes.com/sites/kellyphillipserb/2016/04/25/how-long-to-keep-tax-records-and-financial-documents-after-tax-day.
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