Tuesday, April 22, 2014

How Long Do I Have To Keep My Tax Documents ... Really?

Recent question from a client:  I have tax returns back to 1988, I am having items shred, can I shred some of these?

My answer:  Under "normal" circumstances, you can be audited for 3 years from the date you filed a return or the April 15 deadline, whichever is later for a given year.  Just to be safe, I advise keeping all records used to justify income and deductions on a return for one year beyond that, or 4 years.  All records include such things as all the W-2s, 1099s, bank and credit card statements, invoices, receipts, calendars, mileage records, etc.  Scanned copies of all these is a good option, as long as you keep a backup in a separate physical location.  I particularly recommend scanning any receipts or other documents printed on thermal paper, because these rapidly fade to an unreadable, useless state.

"Normal" circumstances implies that