Uncle Sam requires that you keep records to support the numbers on your tax return. Generally, you should keep these records for as long as they are relevant. Records are relevant for the time period during which you may still amend or the IRS can audit your tax return.
The IRS has up to 3 years to audit your return. If you under-report your income by 25% or more, the IRS has an additional 3 years to audit your return. Thus, you should follow a general policy of keeping all tax records for at least 6 years.
Here are my recommendations for retention:
Permanent
* It is a good policy to save copies of your 1040 and
supporting schedules indefinitely.
* Financial Statements
* Corporate stock records
* Corporate records and minutes
* Real estate records (especially your home)
* Home improvements
* IRA records
Ownership plus 7 years
* Asset & depreciation records
* Investment records
7 years
* General ledger
* Journals
* Bank statements and canceled checks
* Mileage, travel & entertainment records
Remember that these are general guidelines only. If you have any questions about any records please give us a call.
