After your taxes are complete it is always a good idea to go through your records and organize what you should keep and what you can get rid of.
How long to keep records is a combination of judgment and state and federal statutes of limitations. Since federal tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects underreported income, it’s wise to keep tax records at least seven years after a return is filed. Requirements for records kept electronically are the same as for paper records. Many records can easily be kept on-line now and downloaded and to your computer, external drive or cloud account.
Records Retention Guideline # 1: Some items should never be thrown out
This is because these items would be hard to replace and you may be asked to provide them later in life. I suggest storing these “permanent records” in an expanding file or wallet – preferably in a fire safe box:
Records Retention Guideline # 2: Everything Else
You should retain these records according to the following guidelines:
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