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How Long Should You Keep Your Tax Records?

This is a question we often get asked by clients, how long should they keep their tax records and backup documentation? Below is a quick reference guide from the IRS outlining how long you should keep your documents:

1) Keep records for 3 years (if situations 4, 5, and 6 below do not apply to you).
2) Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your tax return.
3) Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4) 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.
5) Keep records indefinitely if you do not file a return.
6) Keep records indefinitely if you file a fraudulent return.
7) Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

Please consult your tax advisor on all the above issues.

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