It may seem tedious, but it may be worth your time to store any and all documents Check this website that relate to your specific returns. If the state or federal government finds it necessary to take a deep dive into your financial situation, these documents can substantiate your claims.
Some of the most important records you should keep include:
1099s
Business documents
Deposit slips
Supporting documentation of itemized deductions
Invoices
Mileage logs
Paid bills
Payroll documents
Receipts for medical expenses
Receipts for property records
W-2s
There are also many other records you should maintain to stay organized. Essentially, anything that can be used as proof of what you claim could be valuable and is therefore worth hanging onto.
Federal tax forms
You should always keep copies of your finished federal taxes. It is not unusual for financial advisers or accountants to recommend federal returns be held indefinitely. At a minimum, you should be keeping copies of your federal returns for at least six years after the deadline.
However, you do not need to keep your supporting documents for that long. You should hang onto these documents until the three-year statute of limitations period has ended. Examples of these documents could include records of:
Retirement plan contributions
Alimony payments
Mortgage interest payments
Canceled checks
Charitable contributions
Student loan interest payments
Hanging onto these records makes it easier to amend your finished returns if you misreported your income, failed to include a deduction, or are eligible for credits.
Investment account statements
When filing your refund, you will need to report all investment account events, including stocks, bonds, and other investments. Some of the most important records to keep involving investment accounts include:
Records connect to investment expenses
Prices
Dividends paid
Pay dates
Brokers fees
Brokerage statements
Reinvestments
Other documents for tax purposes
Documentation of received property
According to the IRS, you must keep copies of your 1099-R, Form 5498, and Form 8606 until all money has been withdrawn from these accounts. However, you should never get rid of any ownership documents until the statute of limitations period has passed.
Employment tax records
Business owners and independent contractors must be on top of their employment records. If you hire employees on a W-2, they will be on payroll. You should keep all payroll documents and related paperwork for a minimum of four years from the due date. If you hire independent contractors, maintain copies of their W-9s for the same amount of time.
If you are an independent contractor, keep copies of your W-9 documents and 1099s for at least three years. However, if you are experiencing a fraud issue or have not gotten your returns filed for a specific year, keep these detailed records indefinitely until you get caught up or resolve the situation.
When you report income, you should also maintain copies of these documents if you make a mistake making your quarterly tax payments. If these payments do not accurately reflect the total amount of income you made for that year, the IRS can elect to seek these unpaid liabilities for up to six years from the deadline of the filing. However, this generally only applies if your gross income was underreported by 25% or more.
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