Now That I’ve Filed, What Should I Do With my Records?

Tax Planning

Now that tax season is over and you’ve successfully filed your tax return (Right?), you might be tempted to begin tossing your tax papers away.

Not so fast.

Here are some guidelines for what paperwork you should keep and for how long.

How Long Should You Keep Your Tax Documents?
While your odds are low, the Internal Revenue Service can choose to audit your tax return for up to three years after you file it.

So most people should keep their tax related documents for three years after the tax deadline. Keep in mind that if you extend your tax return, the IRS deadline for auditing gets an extension too.

For example, if you file your 2013 tax return on July 3, 2014, the IRS can audit that return until July 3, 2017. In such a situation, you’ll be grateful you were still in possession of your key tax documents.

Like everything else tax-related, there are exceptions to those general rules. In this case, hopefully, none of the following exceptions will apply to you.

Situations in which the three-year guidance lengthens to a range of six years to FOREVER include your exclusion of 25% or more of your income, fraud, or failing to file a tax return.

In each of these cases, it is best to keep your documentation for far longer than the typical three years advised. Far better, of course: don’t commit fraud or fail to file.

What Documents Should You Keep?
In addition to the tax returns themselves, all tax documents you used to determine your income and deductions should be kept, including your:
• W2s
• 1099s
• Business Profit and Loss Statements
• 1098s (Mortgage Interest Statements)
• Charitable contribution receipts

Some documents should be kept longer than the standard three year timeline, however. Their nature implies that they might affect tax returns you have not yet filed and include items such as:
• Security purchases (like stock trade confirmations). Note that three years after you sell the security, you can toss that paperwork.
• Your home purchase statement (HUD form), as well as receipts for expenses related to home improvements. Three years after you sell the house, you can throw away all of that paperwork.

Keep in mind that you don’t have to keep all of these items in paper form. You can keep digital copies, but consider a reliable back-up system.

Tax filing season may be over, but your obligation to hold on to proof you filed accurately continues.

Comments (6) Leave your comment

  1. Is the mortgage interest on home equity debt (HELOC) on/secured by your first home, which was used to finance the building of your second home, all tax deductible up to the $1 million limit ?

  2. Can I get a copy of value on contributed gifts to charity organizations? Like the amount you can claim for clothing donated.

  3. I submitted my state and federal, but when I tried to print out the forms, they came out garbled, totally unreadable. I have never had the problem in the past ten years with Tubro Tax, so what is the solution?

  4. Re the 1098 Form – is the mortgage interest on home equity debt (HELOC) on/secured by your first home, which was used to finance the building of your second home, all tax deductible up to the $1 million limit ? And, yes, a response would be appreciated. Thanks.

  5. Re the 1098 Form – is the mortgage interest on home equity debt (HELOC) on/secured by your first home, which was used to finance the building of your second home, all tax deductible up to the $1 million limit ?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s