What tax records do I need to keep and for how long?
To be safe, keep your income tax returns indefinitely since they can be your paper trail. Documents regarding investment, real estate and business assets, and other supporting documents (receipts, canceled checks, credit cards, and so forth) should be kept for six years. This is because the IRS can go back three years from the filing date to audit your records and returns, and impose additional tax. In some cases, the IRS can audit up to six years after filing if income is under-reported by 25% or more or if there is suspected fraud. Even if you have always been completely honest about your income and have never been audited, you still need to keep tax records. Sometimes mistakes are made that are not your fault and having the records on hand can help correct the problem with less hassle.→ Read More