Keeping Records for IRS

[Sparkplug]

Cleaning files and thought that I should check what is the amount of time I need to keep receipts. This is what I found and #6 cracked me up

Period of Limitations that apply to income tax returns

1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

The following questions should be applied to each record as you decide whether to keep a document or throw it away.

 

[isufbcurt]

Cleaning files and thought that I should check what is the amount of time I need to keep receipts. This is what I found and #6 cracked me up

Period of Limitations that apply to income tax returns

1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

The following questions should be applied to each record as you decide whether to keep a document or throw it away.

I'd follow 6. Seems like the safe bet.

 

[IcSyU]

I hate to say it but I've had to deal with #6 before. Always a good way to endear yourself to the IRS...file a return showing $200,000 in profit so the bank doesn't pull your LOC while reality is you lost $600,000.

 

[throwittoblythe]

This brings up a question I often have...

I only NEED to keep receipts if I itemize, correct? Any formal IRS forms would be on file at the various institutions (mortgage, bank, etc). I keep all files associated with each return anyway, but if I were audited and unable to find a document or it had been destroyed, I should be able to contact the institution and find it, right?

 

[isufbcurt]

This brings up a question I often have...

I only NEED to keep receipts if I itemize, correct? Any formal IRS forms would be on file at the various institutions (mortgage, bank, etc). I keep all files associated with each return anyway, but if I were audited and unable to find a document or it had been destroyed, I should be able to contact the institution and find it, right?

Theoretically yes, in actuality good luck with that.

 

[IcSyU]

This brings up a question I often have...

I only NEED to keep receipts if I itemize, correct? Any formal IRS forms would be on file at the various institutions (mortgage, bank, etc). I keep all files associated with each return anyway, but if I were audited and unable to find a document or it had been destroyed, I should be able to contact the institution and find it, right?

Depends on the institution's document retention policy and how far back you're going...

I know a lot of banks outsource their tax document creation and when you call to request a copy they have to call someone else to get said copy.

 

[isufbcurt]

I hate to say it but I've had to deal with #6 before. Always a good way to endear yourself to the IRS...file a return showing $200,000 in profit so the bank doesn't pull your LOC while reality is you lost $600,000.

so bank fraud too?

The IRS should have been happy they overstated their income.

 

[IcSyU]

Did they do as #6 said to do?

Kinda. Getting receivables and payables straightened out isn't too bad. Trying to complete a job progress schedule? Good effing luck.

 

[IcSyU]

so bank fraud too?

The IRS should have been happy they overstated their income.

Minor details.

 

[Sparkplug]

I have some recent gas receipts that have faded and are unreadable, so I've started using only credit card for those to have backup


Wanted to pdf some health insurance records but when we changed insurers they shut me out of their site.

 

[Trice]

My take on this is that it's 2019 and most if not all of your documents should be available via PDF on the internet anyway. So there's very little cost involved in holding on to them, even forever. Even if you don't need it for the IRS someday, you might want it for reference.

 

[wxman1]

I am looking forward to six years from now when we will be outside the window of my wife's in home daycare. Damn that was a mess.

 

[Mtowncyclone13]

#6 seems like, "Keep a memento of the murder in a secret box in your closet"

 

[3TrueFans]

#6 seems like, "Keep a memento of the murder in a secret box in your closet"

You guys don't keep trophies?

 

[Mtowncyclone13]

You guys don't keep trophies?

i do. it's usually their winter boots.

 

[throwittoblythe]

Theoretically yes, in actuality good luck with that.

That's kind of what I figured. We keep them anyway, but I've often wondered what would happen if our basement floods, fire, etc, and we lose those documents. Right now, we just have one W2 and the mortgage, so pretty low chance for an audit.

 

[Bobber]

I always thought 7 years was a pretty safe number.

 

[isufbcurt]

That's kind of what I figured. We keep them anyway, but I've often wondered what would happen if our basement floods, fire, etc, and we lose those documents. Right now, we just have one W2 and the mortgage, so pretty low chance for an audit.

As someone else mentioned it will depend on the Company's records retention policy. And then if they do have it they will mostly charge you a fee for it.

 

[throwittoblythe]

My take on this is that it's 2019 and most if not all of your documents should be available via PDF on the internet anyway. So there's very little cost involved in holding on to them, even forever. Even if you don't need it for the IRS someday, you might want it for reference.

Good point. I should really just scan all my documents in and have them in PDF format. I'll add that to the list of things to do this go around.

 

[throwittoblythe]

As someone else mentioned it will depend on the Company's records retention policy. And then if they do have it they will mostly charge you a fee for it.

Another dumb question...when a company creates an IRS form (W2, 1098, etc), is that on file with the IRS? Meaning, does it go to me and the IRS? Or only to me?