UPRIGHT TAX
Alicia Johnson, EA, CFE
Recordkeeping
Excerpted from the IRS guidance:
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Keep your records of income, deduction or credit shown on your tax return until the period of
limitations for that tax return runs out.
The period of limitations is the period of time in which you can amend your tax return to claim a
credit or refund, or the IRS can assess additional tax.
Keep copies of your filed tax returns. You may file an amended return in the future.
Period of Limitations that apply to income tax returns
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Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
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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.
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Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
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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.
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Keep records indefinitely if you do not file a return.
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Keep records indefinitely if you file a fraudulent return.
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Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
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Keep records relating to property until the period of limitations expires for the year in which you
dispose of the property. You must keep these records to figure any depreciation, amortization,
or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the
property.
If you received property in a nontaxable exchange, your basis in that property is the same as
the basis of the property you gave up, increased by any money you paid. You must keep the
records on the old property, as well as on the new property, until the period of limitations
expires for the year in which you disposed of the new property.
Do not discard your records until you check to see if you have to keep them longer for other
purposes such as for an insurance company or creditors.