Sometimes you feel like a hoarder, watching piles of records, documents, tax returns and receipts grow precariously higher, higher, higher, until suddenly, whoosh! The whole thing collapses, burying you underneath. No! That’s just your recurring nightmare. Or is it? Actually, that was the Bones season…
Sometimes you feel like a hoarder, watching piles of records, documents, tax returns and receipts grow precariously higher, higher, higher, until suddenly, whoosh! The whole thing collapses, burying you underneath.
No! That’s just your recurring nightmare. Or is it? Actually, that was the Bones season finale!
But when it comes to tax paperwork, taxpayers are rightly confused about what you can toss and what you should keep in order to stay in good standing with the IRS.
The two most common tax questions I get are:
1) How long shall I keep my tax records?
2) Which tax records must I keep?
TaxMama says to keep all tax records forever, except, you’d probably run out of room at some point in the not too distant future.
Barring that, these are the tax records to keep:
Anything else? Use your judgment. Generally, you can toss everything after five to seven years.
When it comes to digital copies of tax records, the best version to keep is a PDF file (Adobe’s Portable Digital Format). It seems to be the most consistently available file format. Older files can still be opened with the current version of Adobe. The Adobe Reader can be downloaded for free at Adobe.com.
Remember to shred your documents and tax records. If you don’t want to stand there all week destroying years worth of tax records, call a shredding service. They can destroy your life in a half hour or less.
Beware! TaxMama’s law of tossed documents: The minute you discard it, no matter how long you have kept it – you will need it. Urgently.
Eva Rosenberg, EA is the publisher of TaxMama.com , where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com.
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