Orlando, Fla. (Ivanhoe Newswire) — Tuesday, April 15th is the day many of us dread. It’s the deadline for filing our taxes. And then, after you file, you have to decide which important documents, letters, and contracts you can keep and which ones you can toss. You may have heard that you should keep important records for seven years. But do you really need to? And which documents are we talking about? Document declutter.
Ready for some spring cleaning? Is it time to donate unused clothes, toss some trash, and ditch broken appliances?
But what about all those old documents you’ve been holding on to?
“There’s what they call document retention checklist, and they all say basically the same thing, that you should keep important documents for three to seven years,” said Gary Kane, Certified Public Accountant.
But the type of document matters.
“You should keep copies of your tax returns for at least seven years,” said Kane.
The IRS typically audits returns filed within the last three years, but Uncle Sam could go as far back as six years if you make a “substantial error” like filing a fraudulent return, not filing at all, or failing to report your full income. With supporting tax documents like W-2 forms, receipts and charitable contributions, keep them for a minimum of three years. As for records like stocks, house deeds and other real estate and investments …
“You need to keep that until you dispose of the asset,” explained Kane.
As for bank and credit card statements, you can shred those after about a year. Keep them for seven if they support specific tax deductions. The bottom line?
“There’s absolutely no reason to keep documents for a long period back like 15 years or, you know, or 20 years,” said Kane.
Now there are a few documents you should never throw away, including divorce decrees, death certificates, health and immunization records.
Contributors to this news report include: Shernay Williams, Producer; Bob Walko, Editor.
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Source:
https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits
