Friday, March 8, 2013

Record Retention

You’re going through your files and want to know how long you need to keep your tax return copies and tax related documentation?  We suggest that all copies of tax returns be kept indefinitely.  You never know when you might need them.

According to the IRS, taxpayers should keep a copy of their tax returns and all return-related, substantiating documents for three years after filing the return (the three-year statute). However, records relating to real estate, stock transactions, retirement accounts and business or rental property which can help establish cost basis and gain or loss, should be kept for as long as you have the property plus an additional three years after you dispose of it.

Such tax records can include brokerage statements, bills, credit card receipts, canceled checks and other receipts, invoices, mileage logs, proofs of payment and any other records that support deductions or credits claimed on a tax return.

Of course if you do have documents that are old and are safe to dispose of, you want to make sure you properly dispose of “personally identifiable information” and any financial information. We recommend that paper documents get cross-cut shredded or completely burned.

For more information on what kinds of records to keep go to

David Prusaitis, CPA, CVA

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