Dear ,

As soon as the tax season concludes, the next question you should ask yourself is, are your tax records safe? In case you haven’t asked yourself this, I took the liberty of asking on your behalf. Are they safe? Where are you keeping them?

 

The IRS provides guidance for small businesses and self-employed individuals on keeping tax records for a reason. For example, you may be in tax situations in the future that require some verifications from past tax records. If you can’t produce them, you will be in trouble.

 

How long should you keep tax records?

 

Below are examples of how long you should keep tax records. Timeframes differ depending on the tax situation you may need them for.

 

Keep records for:

• 6 years if you did not report more than 25% of the gross income on your return
• Indefinitely if you do not file tax returns or if you file a fraudulent return
• 4 years (employment tax records) after the date the tax becomes due or is paid
• 7 years if you file a claim for worthless securities or bad debt deduction
• 3 years if all the above does not apply to you.

Therefore, even if you have nothing connecting you to items 1-4 above, you still must keep tax records for at least 3 years. Ensure that they are safe in your office and on an online vault or drive as a backup in case of fire or theft.

 

Call our office at (202)618-1297 if you need help with keeping your tax records.

 

Kindly note that our office will be closed between April 20 and May 11, 2022.