Tax: Records Retention

Our tax returns are filed.  How long do I have to keep all the receipts, backup, and other records around? 

Well… it depends.  The safe and most conservative answer is 7 years as long as you filed a valid return.  However, you will see from the table below that it may be a shorter retention requirement.

How Long To Keep Records

(Excerpt taken from IRS Publication 583)

Keep in mind though, that other organizations, such as your insurance company or creditors may require you to keep your records longer than the IRS does.

Can I just keep soft copies?

 

Yes, if you do it the right way!  You are not required to keep original hard copies of your records.  You can store your books and records electronically, as long as they provide a complete and accurate record of your data.  You need to be able to retrieve and reproduce the soft copies in legible format.  Therefore, you must make sure that you have a method of storing the data such that it is easily searchable and compartmentalized into the applicable tax year.

We have set this up for many of our clients, let us know if you’d like our help to get you closer to being paperless!

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