September 9, 2021
Every year individuals and couples file their tax returns to report income generated during the previous year to the Internal Revenue Service (IRS). Whether you are filing for personal or business purposes, the result is a packet of paperwork that has multiple uses. Depending on if you are attempting to obtain a loan (specifically for a business), buying real estate, under audit, or for a variety of many other reasons - having your prior year’s tax return on hand can be beneficial or even required.
Unsure if you need to file a tax return? Certain parameters could deem individuals exempt from filing but these are limited. For everyone else, getting a return in on time is often the best method, even if having to use an extension, but returns may be filed for any past due dates however refunds are typically only issued back for a few years. If you owe taxes, then expect penalties and interest to be applied as well, when a return is filed. However, once you have an acceptable return in hand, how long do you keep it?
Generally speaking, the IRS can audit returns for the past three years but depend on their findings or reasoning, this can be extended up to six years or beyond. Recommendations are accepted returns and backing evidence paperwork should be kept for at least four years after the return date.
For both businesses and individuals, keeping loan information on hand until fulfilled is suggested. Depending on the type, amount, or subject of the loan, these may extend beyond the typical four-year period. If so, proper records and initial paperwork should be kept available.
Mortgage(s) should also be handled similarly to loans. These are likely to extend beyond four years and should be kept until completion. In addition, purchase paperwork will also come in handy if the property is ever sold as it can be used to show either a profit or loss following ownership. Depending on the property in question and other associated factors, this could have an impact on your return for the year in which this transaction takes place.
Any depreciated purchases, especially in business returns, should have paperwork kept for the length of time the subject remains available. Just like a mortgage, any future deals or movement of the depreciable asset could have an impact on that year’s tax return. Ensuring you have the appropriate paperwork to back any figures used is important and helpful should questions arise.
The tax and financial experts at Bloch Rothman and Associates are ready to answer any of your tax questions or assist you and/or your business today. In addition, they can also take care of multiple other issues dealing with paying or owing back taxes, required audits from other entities besides the IRS, or any other personal or corporate wealth management issues. Along with providing a quality tax service, our group can also complete tax returns or answer any other factors associated with financial issues or concerns you may have. Serving in Denver and all of the surrounding areas for 35 years, our firm has an extensive history of helping clients with any 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 and filings, there are also several bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!