Toss Or Keep? The Lowdown On What To Do With Those Tax Returns

Toss Or Keep? The Lowdown On What To Do With Those Tax Returns

When tax season is finally over, people in San Diego can finally exhale. With all of the paperwork and records to support their filing, many are left with a pile of documents that have no further use. The question then becomes, “How long do I have to keep all this stuff?” 

Period Of Limitations

The answer is simple, yet complicated, because it depends on a few things. Different types of records should be kept for different periods of time in order to satisfy potential inquiries from the IRS and other agencies. 

Below is a basic breakdown of how long to keep certain items. Use this as a guide when getting ready to clean out those filing cabinets: 

  • - Keep records for 3 years from the date of filing, or 2 years from the date you paid the tax, if you file a claim for credit or refund after you file the return.
  • - Keep records for 7 years if you file claim for a loss from worthless securities or bad debt deduction.
  • - Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return. Keep records indefinitely if you do not file a return.
  • - Keep records indefinitely if you file a fraudulent return.
  • Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
  • - In general, with no complications or special accommodations, simple tax returns should be kept for 3 years. 

Property Considerations  

When it comes to records that are connected to a property in or around San Diego, they should be kept until the period of limitations expires for the year in which you dispose of the property. These records must be kept to figure any depreciation, depletion deduction, and to figure gain or loss when you sell or dispose of the property.  If the property was received in a nontaxable exchange, you must keep the records on both properties until the period of limitations expires for the year in which you dispose of the new property.

Careful Disposal Is Essential 

When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does. 

But when it’s time to finally get rid of your tax returns and all documents associated with them, you must be sure to dispose of them properly. These documents contain very sensitive information, such as social security numbers and bank statements. In the wrong hands, they can lead to large financial losses.  Don’t just put them on the curb of your San Diego home for trash collection. The best way to dispose of these documents securely is to shred it all to protect yourself now and in the future. 

Share this Post:

What our Customers are Saying


“Lance, I think we are DONE!! Not only do I not owe the $12,000, they are sending me a refund check! Now I only owe for 2016 (which we both knew and expected!). I am very happy, I know I’ve been a pain in your *** because of how much I don’t understand this stuff, so thank you. If you need a very positive review for you company/website, let me know. It was a long process but I’m happy with the outcome. Thank you for sticking with me thru the whole thing!!”
Chris
Customer

Contact Us Today