Tax Tip #19: How long should you keep tax records?

Keep your tax records for as long as you might be audited for a given year.  Generally, that’s three years after you file the return, though the IRS has six years to audit you if you’ve omitted more than 25% of your gross income from a return.  There is no audit limit for fraudulent filings or for returns that were never filed.

After you file your taxes, you will have many records that may help document items on your tax return. You will need these documents should the IRS select your return for examination. Here are five tips from the IRS about keeping good records:

1. Normally, tax records should be kept for three years.
2. Some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.
3. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
4. Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
5. For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals.

For further questions or filing assistance, contact our office at 559.924.1225.