Old Tax Returns - How long to keep
Many of you are always asking how long should you keep your old tax recorrds. My general
rule of thumb for tax records has always been 7 years however my stance is now changed to 4 years. Business records are different
so please call my office to discuss prior to destroying.
An article found in "Tax Hotline - January 2007" states
that generally tax records should be maintained for four years after the filing date (exception to this rule are records
relating to cost basis (stocks, mutual funds, real estate - these type of records should be held for three years after property is
sold). It recommends that tax records not be maintained for any longer than required since the IRS could issue a summons requiring
you to produce such records. The records can then be used to help strengthen a case against you. Caution: if your computer
contains sensitive financial information relating to the olds returns, consult a computer technician to ensure that deleted records
are actually gone.
This article recommends retaining your records no longer than 4 years and I believe that this is appropriate.
However please use caution if there are complicated areas to your tax return.
The IRS has an article on this same issue. Clickhere to go to their article
