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

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.

Michael Rubin

Author of the bestseller Beyond Paycheck to Paycheck, and the upcoming The Savings Solution, Michael B. Rubin is a Certified Public Accountant (CPA) and a CERTIFIED FINANCIAL PLANNER professional. In addition to his experience providing sophisticated financial advice to affluent clients, Michael has been a key source of information for over a decade to countless others. He speaks passionately about and provides guidance on virtually all personal financial planning topics. Michael has appeared in various media, including radio and TV stations across the country, plus national media such as CNN Money.com, latimes.com, The Wall Street Journal, SmartMoney.com, Chicago Tribune, Financial Advisor Magazine, and Investment News. Prior to founding Total Candor LLC, Michael worked in the personal financial services practices of two of the former "Big Six" accounting firms. Subsequently working for several years as a new venture executive for Toys "R" Us, Inc., he made sure that he never actually grew up. He holds an undergraduate business degree from the Ross School of Business at the University of Michigan and an MBA from the Kellogg School of Management at Northwestern University. Michael lives in New Hampshire with his wife and children.

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 ?

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