Every individual’s situation is going to be unique which requires different forms and documentation for each tax return. Depending on your personal status, work, income, investments, and other factors the amount of necessary forms and documentation in order to file an accurate return varies. In addition, companies, partnerships, and sole proprietorships all require separate backup for their reported figures. This information is critical in order to file an accurate return and once turned into the Internal Revenue Service (IRS) should be kept for some amount of time - but how long?
The IRS typically audits returns
filed within the past three years. However, there are rare instances where they may exceed this timeframe based on findings or a significant error. For this reason, it is best to not immediately destroy any of the information used to justify your return. In fact, you should probably find a safe place to store all of your backup data and other information for at least four years or longer, depending on the type of paperwork.
Tax returns should be kept for four years from the date of filing in order to either amend or support any potential audit from the IRS. In the event that returns farther back would be needed, there will likely be some type of indication prior to this period. For the average American, rotating your information in and out in this timeframe is proper practice.
However, just because you are removing returns after four years doesn’t mean that all of the information should be discarded. Depending on the type of return being filed and the existing documentation, there may be longer limits for holding onto various forms and figures. For example, any depreciable assets
should have records on file until the item is no longer used or in service. This helps to determine its impact on a return over the general four year time period and can assist your tax preparer with specific figures associated with these assets.
Any loans or mortgage information should also be kept until they are paid in full. Doing so ensures there is no question about the term limits, rates, and other figures which may be reported on a return - especially since these numbers transcend over multiple years.
Once the time period expires for keeping these records, it is important to dispose of them properly. Much of the backup paperwork required for filling out a tax return has extremely sensitive information such as Social Security numbers, bank account information, and other demographics which may make it possible to steal your identity. Since this is the case, shredding all paperwork is recommended or some other method which ensures no one can access the information once it leaves your possession.
If you’re ready to file a return or need help determining exactly which potential credits and deductions may apply to your given situation, then let the tax professionals at Bloch Rothman and Associates
assist you today. In addition to providing answers to your deduction or credit tax questions, they can also take care of multiple other issues dealing with paying or owing back taxes, required audits signaled by either the IRS or an outside agency, or any other personal or corporate wealth management issues.
Along with providing a quality tax service, our group can also complete all types of returns or answer any other factors associated with financial issues or concerns you may have. Serving Denver and all of the surrounding areas for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate, or any other filings, don’t hesitate to contact us
today. Available for all of your tax needs, there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and providing the type of service you can rely on whatever your needs may be very soon!