Whether you filed your 2016 tax return by the April 18 deadline
or you filed for an extension, you may be overwhelmed by the amount of
documentation involved. While you need to hold on to all of your 2016 tax
records for now, it’s a great time to take a look at your records for previous
tax years to see what you can purge.
Consider the statute of limitations
At minimum, keep tax records for as long as the IRS has the
ability to audit your return or assess additional taxes, which generally is
three years after you file your return. This means you likely can shred and
toss — or electronically purge — most records related to tax returns for 2013
and earlier years (2012 and earlier if you filed for an extension for 2013).
In some cases, the statute of limitations extends beyond three
years. If you understate your adjusted gross income by more than 25%, for
example, the limitations period jumps to six years. And there is no statute of
limitations if you fail to file a tax return or file a fraudulent one.
Keep some documents longer
You’ll need to hang on to certain records beyond the statute of
limitations:
Tax returns. Keep
them forever, so you can prove to the IRS that you actually filed.
W-2 forms. Consider
holding them until you begin receiving Social Security benefits. Why? In case a
question arises regarding your work record or earnings for a particular year.
Records related to real estate or
investments. Keep these as long as you own the asset, plus three years after
you sell it and report the sale on your tax return (or six years if you’re
concerned about the six-year statute of limitations).
This is only a sampling of retention guidelines for tax-related
documents. If you have questions about other documents, please contact us.
© 2017
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