LGH Consulting, Inc.

  • Home
  • About
  • Services
  • Resources
  • Blog
  • Contact

October 13, 2020 By LGH Consulting

What tax records can you throw away?

October 15 is the deadline for individual taxpayers who extended their 2019 tax returns. (The original April 15 filing deadline was extended this year to July 15 due to the COVID-19 pandemic.) If you’re finally done filing last year’s return, you might wonder: Which tax records can you toss once you’re done? Now is a good time to go through old tax records and see what you can discard.

The general rules

At a minimum, you should keep tax records for as long as the IRS has the ability to audit your tax return or assess additional taxes, which generally is three years after you file your return. This means you potentially can get rid of most records related to tax returns for 2016 and earlier years.

However, the statute of limitations extends to six years for taxpayers who understate their adjusted gross income (AGI) by more than 25%. What constitutes an understatement may go beyond simply not reporting items of income. So a general rule of thumb is to save tax records for six years from filing, just to be safe.

Keep some records longer

You need to hang on to some tax-related records beyond the statute of limitations. For example:

  • Keep the tax returns themselves indefinitely, so you can prove to the IRS that you actually filed a legitimate return. (There’s no statute of limitations for an audit if you didn’t file a return or if you filed a fraudulent one.)
  • Retain W-2 forms until you begin receiving Social Security benefits. Questions might arise regarding your work record or earnings for a particular year, and your W-2 helps provide the documentation needed.
  • Keep records related to real estate or investments for as long as you own the assets, plus at least three years after you sell them and report the sales on your tax return (or six years if you want extra protection).
  • Keep records associated with retirement accounts until you’ve depleted the accounts and reported the last withdrawal on your tax return, plus three (or six) years.

Other reasons to retain records

Keep in mind that these are the federal tax record retention guidelines. Your state and local tax record requirements may differ. In addition, lenders, co-op boards, and other private parties may require you to produce copies of your tax returns as a condition to lending money, approving a purchase, or otherwise doing business with you.

Contact us if you have questions or concerns about recordkeeping.

© 2020

Filed Under: News Tagged With: AGI, covid, covid-19, IRS, tax records, w-2

March 17, 2020 By LGH Consulting

Response to COVID-19

March 16, 2020,

Due to the current issues, if you have not yet had your tax return processed, please be aware that you could provide the information to us by fax, email or US Post Office ahead of your scheduled appointment. You can then call us at the scheduled time and we can review together.

We would need the information to us at least two business days ahead of your scheduled appointment to allow us to input and e-mail you the tax returns to provide you time to review and come up with any questions or concerns you may have.

If you do not have an appointment, please feel free to get us the information and your contact information and we will contact you as we complete it or with any questions.

Official Letter.

Filed Under: News Tagged With: corona, corona virus, covid, covid-19, virus

Request An Appointment


    LIKE & FOLLOW US

    yelp linked in

    ©2022 LGH Consulting, Inc. All Rights Reserved.