So, it’s tax filing season. You’ve filed your taxes, and now you’re probably sitting there with a pile of records. What do you do with it? Many Americans pitch their tax lamesa records right away or shred them. But, you really shouldn’t do that. Why? And if you shouldn’t, then how long should you keep your paperwork? In the case of an audit, they can ask you to reach pretty far back to get information. Sometimes, depending on the severity of the claim, they can go as far back as 10 years (usually in cases of tax fraud and similar accusations).
That being said, what should you even keep?
· Bills- If you deduct medical bills, bills for your business or being self-employed
· Copies of the actual return
· Interest forms (Usually 1099-INT)- your financial institution will provide this for you.
· Monthly bank statements if you claim interest
· Receipts- Any non-profit charities, business expenses, etc.
· Tuition information form- your academic institution is required to give you forms for both these and the grants/scholarships you received.
So, the biggest question here is how long should you even go ahead and keep your tax information? Are there things that you need to worry about? The recommended amount of time is 7 years for most records. Other records (old pay stubs, medical bills, or anything that gives you an annual overview after receiving it monthly) only need to be kept for a maximum of 3 years, but honestly, you can throw them out after receiving your annual statement. Keep that paperwork, it’ll save you headache later, especially if you get into a situation where you have to deal with an audit or something similar from the IRS or your tax company.