March 29, 2012
It is officially tax season and we keep getting questions asking how long we should be keeping certain tax-related documents. Instead of answering ourselves, we thought it would be helpful to touch base with Andy Bauerle of Hersman Serles Almond, PLLC to find out what he had to say…
The dreaded due date for individual tax returns in 2012 is just around the corner on April 17th. Even in this digital age, when most of us finish our tax return, we will invariably wind up with a lot of tax paperwork lying around. Before you shove those paper documents into a filing cabinet never to see the light of day again, here are some helpful tips about how long to keep each document type:
You should keep your tax returns forever. Even though the Internal Revenue Service (IRS) has a statute of limitations for auditing returns of 3 years, in special circumstances, they can go back as far as you have filed! Supporting documentation for tax returns, like mortgage statements and property tax information, can usually be discarded after 7 years.
If you have statements for the acquisition of assets, such as purchasing a home, or buying stocks, you should keep these documents until that asset is sold plus the tax period. This means that you will need to keep the sale records for, you guessed it, 7 years.
A great resource to help figure out how long you should save specific tax records is the IRS’ Publication 552.
Once you know the retention guidelines for your documents, I am sure Innovatively Organized can think of a few ways to store all those documents without cluttering up your office! Contact them if you need help getting your files in order now because it’ll make filing your taxes so much easier for next year.
For additional tips on organizing your documents, download our Paper Management 101 webinar or take a look at our favorite organizing products in our Amazon Store.