Taxpayers should hang on to financial documents

When tax filing season comes around, many people scramble to get their personal documents together, including the previous year's return and in many cases, older ones.

However, this can also invite questions about how long one should hang on to old tax data, not to mention other things such as receipts and miscellaneous documents.

In the Financial Tuneup column on the New York Times Web site, Jennifer Saranow Schultz notes that the Internal Revenue Service requires taxpayers to be able to produce income from the past three years as long as it has been reportedly correctly.

The column adds that in case more than 25 percent of an individual's gross income was not accurately reported, they will need to provide six years of such information. However, Schultz and the experts she spoke with generally advised people to hang on to their documents for as long as seven years even if their returns are all in order.

People are generally advised to keep all of their tax documents in order and in a secure place throughout the year, and if they have concerns about whether they should keep a specific document, a skilled tax preparer is a good person to consult with.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.
Posted To: Tax Ranger's Blog By: Tax Ranger On: Saturday, April 03, 2010
blog comments powered by Disqus