Tax Season is Over- What Should You Do with Your Documents after Tax Season?
You’ve filed your taxes and submitted all your information to the IRS – now it’s time to figure out what to do with all your tax records and documents. Whether you’re a business or individual, the IRS requires that some information be kept for up to seven years – because it’s a possibility that the IRS could request documents pertaining to previously filed taxes, potentially for several years after the fact. It can be tricky trying to figure out how long to keep tax records, how to store them, and when to destroy them. If you’re struggling to figure out what to do with your old tax documents, here are some helpful tips!
Tax season is over – what about all these papers?
From 1099 forms and W2s to tac returns, your tax records contain confidential personal information that needs to stay protected. Generally, the IRS has three years from the date you file to audit your return. You also can file an amended return up to three years later. So, it’s generally a good idea to hang on to your records for a few years.
Take advantage cloud storage for digital tax records
If you’re already used to receiving many of your paystubs, bank statement, brokerage account summaries, and more electronically, it makes sense to utilize digital storage for your tax documents. If you have an account with a secure and reputable cloud storage provider, storing your tax information electronically can be a great alternative to hard copy paper storage. This is a great storage solution for copies of your tax returns, income statements, stock and investment information, and more. If you’re self-employed, scan all receipts connected to utilities, office supplies and overhead costs that you claim as a business expense. For homeowners who are making upgrades, scan receipts for improvements and save them to prove the value of your home has increased.
- The IRS lists recommendations for how long you should keep tax documents. Here’s a few that would be good candidates for cloud storage.
- Keep records relating to property until the period of limitations expires for the year in which you dispose of the property
- Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
- Keep records indefinitely if you do not file a return.
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
- Keep your stock or mutual fund statements for four years after selling an investment
- Keep retirement account and health savings account documents for four years.