How Long to Hold Records

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When to Hold 'Em and When to Fold 'Em

By law, you must keep your tax records for as long as they are needed for the administration of the Internal Revenue Code, which means keeping the documents supporting the income and deductions shown on your tax return until the period of limitations for that return expires.

The Internal Revenue Service has 3 years from the date you filed your return to assess any additional taxes you owe. If you did not report all of your income and it is more than 25% of the gross income you reported on your return, the Internal Revenue Service has 6 years from the filing date of the return to assess additional taxes. If you failed to file a return or filed a fraudulent return, there is no statute of limitations preventing the assessment of additional taxes.

 

You have 3 years from the date you filed your return or 2 years from the date you paid the tax, whichever is later, to file a claim for credit or refund. If you filed your return prior to the due date, it is considered filed on the due date.

 

The following are some general rules for determining how long to maintain your important personal tax records:

Storing records. Store your records safely to prevent data loss or damage that renders them unusable. Scanning documents in your computer is acceptable by the Internal Revenue Service. However, for some records you need to maintain original documents, such as birth certificates, marriage licenses, etc. If you scan your records you will want to organize them in a way that makes them easy to retrieve and sort. PDF files are the most accepted file format. The media on which you store records needs to be protected just like paper products to avoid consequences of fire or flood, or any other event that may render the media unusable.  Offsite storage may be a consideration.  There are several free sources of off site storage via the internet. Archive the data to an external disc such as a DVD disc and store that in a safe place or fire proof safe.

 


 

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