Tax Records Retention
It is important to remember to keep good records for your tax return. Sometimes it can be difficult to know what to keep, and for how long. Here is a general reference list:
| Item | Keep |
|---|---|
| Income tax return, and supporting documents (cancelled checks, receipts, etc.) | Forever |
| Receipts for major home improvements | Until you sell the house |
| Monthly investment statements | Until the year end statements arrive |
| Records of employment taxes | At least 4 years |
Remember, this is a very generalized list. Please contact us to find out if there are more specific records that you will need for tax time, based on your special business needs.
Why Keep Records So Long?
The law requires you to keep income tax returns and supporting documents for only 4 years (although any instance of fraud removes this statute of limitations). However, we recommend keeping your records forever in case you are ever involved in a divorce. These records can also assist the executor of your estate if there are any disputes among your heirs.
If keeping all the physical documents takes up too much space, you can convert them to electronic format: scan the documents, save them as PDFs, and store them on CD. If you do this, consider keeping multiple copies of the CD, one of which should be stored in a safe deposit box.