Save tax files and returns or face imprisonment!

By Roger Chartier:
That may be a bit harsh but…

How long to save tax records, seven years , forever and less.

In general you usually save your tax records for seven years after you filed.

Not seven years after the tax year, unless….

Unless you filed a fraudulent tax return or failed to file, in which case the IRS requires you to keep the records forever.

This is probably to your advantage because your lawyer will have some documentation to better deal with the IRS as they drag you off to jail.

The IRS says: “You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code”.

Be Prepared

Maybe it would be just a monetary fine if you didn’t really screw up  too badly.  The point is to “Be prepared” like a good boy/girl scout.

You can keep some files for less than 7 years but if you aren’t sure then don’t gamble.

The IRS says that an employee’s  W2 forms and some other employment forms can be kept for just four years after filing.

Better safe than sorry

In the end if you face an audit they can ask for any documentation concerning deductions, allowances etc.

Keep records about tax write off donations and home office deductions and any deductions you claim. Did you pay a sales tax? Keep that info as well.

You should have a bill of sale or a receipt for all deductible purchases with the required information on it.

Read what employers requirements are concerning the IRS W2 form




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