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Financial Planning Financial Statements
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Recordkeeping for Taxes
What to Keep and How Long Tax records should be kept on a year-round basis, not hastily assembled just for your annual tax appointment. Without tax records, you can lose valuable deductions by forgetting them on your tax return, or you may have unsubstantiated items disallowed if you are audited. Generally, returns can be audited for up to three years after filing. However, the IRS may audit for up to six years if there is substantial unreported income. The three and six year limits start with the filing of a tax return; if no return is filed, the time limit never starts to run. Which records are important?
How long should records be kept? Just how long you should keep records is partly a matter of judgment and
a combination of state and federal statutes of limitations. Federal tax returns can be
audited for up to three years after filing (six years if underreported income is
involved). It is a good idea to keep most records for six years after the return filing
date. There are some records worth keeping permanently, partly due to
long-term needs and partly because they take up very little room. Consider permanently
retaining a copy of each year's tax return. Contracts, real estate buy/sell records, and
records of property improvements should be retained for seven years after the property is
sold. If you are in business, your record requirements are more extensive. Please call
us; we will be happy to assist you with a system of record retention. |
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Keith O.
Malkemes BUS. (352) 338 0424 FAX (352) 378 5022 keith@cpaofc.com |
Carolyn
Goddard BUS. (352) 338 0424 FAX (352) 373 0631 cgoddard@cpaofc.com |
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3520 N.W. 43rd Street |
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