SaYing Business Expert Edge
How long should I keep tax records?
I get this question all the time! In all honesty, I want to say to just shred them all right away. But, here are the correct answers to this question:
1. Keep 941 employment tax records for at least four (4) years after the date that the tax becomes due or is paid, whichever is later;
2. Keep records for three (3) years from the date of the original return filing or two (2) years from the date the tax was paid, whichever is later, if filing a claim for credit or refund after filing the return;
3. Keep records for seven (7) years if filing a claim for a loss from worthless securities or bad debt deduction;
4. Keep records for six years if income that should have been reported was not reported, and it is more than 25 percent of the gross income shown on the return;
5. Keep records indefinitely if not filing a return;
6. Keep records indefinitely if filing a fraudulent return; Normally, you would just keep it for three (3) years if you do not have number 4, 5, or 6 situations.
In order to save your basement space, consider saving files digitally. Community CPA’s digital space is huge and safe.Feel free to check with us!
I’m just saying!
Ying Sa, Community CPA