By Friday we will be welcoming April and Spring cleaning is in full force. What better way to celebrate than with Spring cleaning! There are few tasks as cathartic as file purging.
A thorough cleanup of your office and home is a great opportunity to find out what records you no longer need to keep and the best way to dispose of them. As you file your taxes, take stock of what files are ready to be discarded and what files should be maintained. Be methodical.
Here are some quick rules of thumb and advice from the IRS about what you need to keep:
What tax records do I need to keep? Here is what the IRS has to say…
Keep copies of your tax returns forever. They aid in preparing future tax returns and making computations if you need to file an amended return. The IRS recommends that you keep supporting documents for as long as you can be audited or held responsible for the filings.
The IRS says it generally audits taxes back 3 years, so keep records supporting deductions at least 3 years after a return was due or filed. However, the IRS also says that if a substantial error is identified, the IRS will not go back more than the last 6 years. So, you may want to hold onto records for 6 years to be sure you’re covered.
Keep payroll tax records for six years.
If you filed a fraudulent tax return, you’re liable into perpetuity, so make sure to hold onto supporting documents.
Legal Shred is eager to help securely purge the obsolete records–and we recycle all shredded paper–an appealing sidebar with Earth Day on the horizon.
For more information of best practices regarding identity theft protection please visit www.legalshredinc.com