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CPAs, Financial Advisors: How long should I keep copies of tax returns? Login/Join 
Three Generations
of Service
Picture of PHPaul
posted
I have copies of every return back to 1984 which I'm pretty sure is excessive Eek

Online advice is variable from 3 to 7 years.

My returns are dead simple, standard deduction, a little self-employment income with supporting worksheets for expenses and mileage. No interest income to speak of, no dividends or IRA distributions (yet...)

I'm thinking 5 years as a reasonable happy medium.

What say you?




Be careful when following the masses. Sometimes the M is silent.
 
Posts: 11534 | Location: Downeast Maine | Registered: March 10, 2010Reply With QuoteReport This Post
thin skin can't win
Picture of Georgeair
posted Hide Post
Assuming you're not being audited for fraud, the window for audit is 3 years from the time of filing, so 4-5 years should be fine.

Personally, mine are all scanned so no real advantage to peeling off the old ones to make my PC lighter. As I recall you were gathering up paper forms recently so I suspect yours are in a more papyrus-based condition.



You only have integrity once. - imprezaguy02

 
Posts: 9442 | Location: Madison, MS | Registered: December 10, 2007Reply With QuoteReport This Post
Three Generations
of Service
Picture of PHPaul
posted Hide Post
quote:
Originally posted by Georgeair:
As I recall you were gathering up paper forms recently so I suspect yours are in a more papyrus-based condition.


Correct. I'm a bit of a Luddite when it comes to trusting electronic storage.




Be careful when following the masses. Sometimes the M is silent.
 
Posts: 11534 | Location: Downeast Maine | Registered: March 10, 2010Reply With QuoteReport This Post
Drill Here, Drill Now
Picture of tatortodd
posted Hide Post
Here is what the IRS has to say about the topic:
quote:
How long should I keep records?

The length of time you should keep a document depends on the action, expense, or event which the document records. Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.

The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax. The information below reflects the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.

Note: Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return.
Period of Limitations that apply to income tax returns

1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

The following questions should be applied to each record as you decide whether to keep a document or throw it away.
Are the records connected to property?

Generally, keep records relating to property until the period of limitations expires for the year in which you dispose of the property. You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

If you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property.
What should I do with my records for nontax purposes?

When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.



Ego is the anesthesia that deadens the pain of stupidity

DISCLAIMER: These are the author's own personal views and do not represent the views of the author's employer.
 
Posts: 17487 | Location: N. Houston, TX | Registered: November 14, 2005Reply With QuoteReport This Post
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Picture of 280nosler
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Tator Todd pretty much nailed it. If you have amended a submittal, claimed bankruptcy, been audited, etc, plan on keeping them indefinitely, or until you have gone a minimum of 7 years past said event. If this does not apply, keep them for 5-6 years. They take up less room than a year's worth of cable bills, so it is easy to maintain.




Nut up or Shut up!
 
Posts: 8254 | Location: 1200 yards out | Registered: January 20, 2010Reply With QuoteReport This Post
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Picture of mcrimm
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I have mine from 1975 to present. I guess I could clean our a drawer on my filing cabinet. Sometimes I like to go back and see what it was like to earn $1,000 a month and feel like I was on top of the world.



I'm sorry if I hurt you feelings when I called you stupid - I thought you already knew - Unknown
...................................
When you have no future, you live in the past. " Sycamore Row" by John Grisham
...................................
Liberalism is a failure to find pathways to intelligence in your brain. - David Lawrence
 
Posts: 1748 | Location: Kalispell Montana & Florida’s Emerald Coast for the Winter | Registered: December 24, 2013Reply With QuoteReport This Post
Three Generations
of Service
Picture of PHPaul
posted Hide Post
quote:
Originally posted by mcrimm:
I have mine from 1975 to present. I guess I could clean our a drawer on my filing cabinet. Sometimes I like to go back and see what it was like to earn $1,000 a month and feel like I was on top of the world.


I just pulled everything out of the filing cabinet. I fibbed, I have records back to 1978. I'll shred everything older than 2012, when I retired.

Just for grins, I put together a spreadsheet to chart my AGI from 1978 to 2011. My AGI in 1978 was $8400. I was an E5 that year up to November when I made E6 in the Navy.

I didn't hit the $1K/mo threshold until 1981 when I made Chief.




Be careful when following the masses. Sometimes the M is silent.
 
Posts: 11534 | Location: Downeast Maine | Registered: March 10, 2010Reply With QuoteReport This Post
Invest Early, Invest Often
Picture of TomV
posted Hide Post
A related question......

I scan all my supporting documents and my Tax guy provides me with a PDF file of the return. So I have 20 plus years of returns and documentation.

Is there any certain length of time I should keep the original paper copies ?


______________________________

"Elections have consequences, and at the end of the day, I won. So I think on that one I trump you.” - President Barack Obama
 
Posts: 686 | Location: Planning My Escape From The Bay Area | Registered: February 15, 2003Reply With QuoteReport This Post
Age Quod Agis
Picture of ArtieS
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I usually recommend 7 years.



"We may consent to be governed, but we will not be ruled." - Kevin D. Williamson, 2012

"All the citizens of this land are of right freemen; they owe no allegiance to any class and should recognize no task-masters. Under the chart of their liberties, under the law of high heaven, they are free and without shackles on their limbs nor mortgages upon the fruits of their brain or muscles; they bow down before no prince, potentate, or sovereign, nor kiss the royal robes of any crowned head; they render homage only to their God and should pay tribute only to their Government. Such at least is the spirit of our institutions, the character of our written national compact."

Charles Triplett O’Ferrall of Virginia - In Congress, May 1, 1888
 
Posts: 9701 | Location: Central Florida | Registered: November 02, 2008Reply With QuoteReport This Post
Avoiding
slam fires
Picture of 45 Cal
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I got nailed in early sixties,paid the bastards with money order.
Had to pay it again,that was when I first got of the service and book keeping and checking were foren to me.
Lesson was learned,keep all my stuff for decades
 
Posts: 21778 | Location: Georgia | Registered: February 19, 2007Reply With QuoteReport This Post
Member
Picture of Sailor1911
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The other thing to keep in mind is tax basis in assets. For example, let's assume you bought some stock in 1980 and have been dividend reinvesting all along the way. When you bought it, it was held through "Broker A" and you are now up to "Broker D". Until recently, brokerages were not required to transfer the cost basis information when the account transferred from one to another. So, unless YOU or your new broker were diligent and brought the cost basis information to the succeeding broker and made them update the records, your cost basis may have disappeared along the way. Then when you sell it, it is an absolute nightmare and expensive to reconstruct the cost basis or you elect to pay tax on a higher gain number to forgo the headache.

So, if you dividend reinvest, you should keep good records of all transaction activity for as long as you own the shares. Once sold, you can dispose of them a minimum of three years out from the sale.


------------------------------
Place your clothes and weapons where you can find them in the dark.

“If in winning a race, you lose the respect of your fellow competitors, then you have won nothing” - Paul Elvstrom "The Great Dane" 1928 - 2016
 
Posts: 2770 | Location: Wichita, Kansas | Registered: March 27, 2011Reply With QuoteReport This Post
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Related to the thread for the new found brother and other long lost family. If it wasn’t for my pack rat grandma keeping her tax returns since the 1940’s and my dad snooping through them within the last decade while cleaning out her house to make it ready to rent after she got senile he never would have discovered his dad was paying child support in those years for the brother he didn’t meet till he was 75.

So unless you have something to be found out long after your gone I say keep 7 years.
 
Posts: 3270 | Location: San Francisco Bay Area  | Registered: November 23, 2008Reply With QuoteReport This Post
Member
Picture of mikeyspizza
posted Hide Post
quote:
Originally posted by 280nosler:
They take up less room than a year's worth of cable bills, so it is easy to maintain.
I don't keep these either! Cool
 
Posts: 2888 | Location: North Carolina | Registered: August 16, 2003Reply With QuoteReport This Post
His Royal Hiney
Picture of Rey HRH
posted Hide Post
Before you shred your tax returns, consider this. I had physical Tax Records since 1987. Last year I scanned them into PDF files.

I kept the last 7 years and shred the rest. Since 2016, I've scanned the supporting documentations like charitable receipts, W2s, property taxes, etc.
2018 is the first year I'm not keeping any hard copies. All PDF files. I store them in an encrypted volume on my hard drive, backed up to 3 separate USB drives - one weekly, the other 2 alternating bi-monthly, and a back up to two separate encrypted cloud servers.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 15411 | Location: Bay Area, CA | Registered: March 24, 2011Reply With QuoteReport This Post
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