How Long to Keep Tax Returns: 7 Questions to Consider
What is the Period of Limitations?
What is the Period of Limitations? First, let’s start with some definitions. As always, the IRS has some slightly confusing terminology around how to measure the amount of time you should keep tax returns. According to the IRS, the period of limitations is the “period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax.”
How Long to Keep Tax Returns (according to the IRS)
For the actual tax return itself, the IRS advises keeping them forever. I would 100% agree with that. Especially in the digital age, where everything can be saved on a hard drive or backed up in the cloud, there’s no reason to toss your actual tax returns.
Unique Requirements for Property Owners
One of the first possible exceptions to the rules is for keeping tax records related to property (such as your personal home, cars, or rental property). According to the IRS, you should keep records relating to property “until the period of limitations expires for the year in which you dispose of the property.”
Small Business Owners
If you own a small business, have a part-time side hustle or freelance gig, or get a lot of your income from 1099s or under-the-table jobs, there are some special considerations for you.
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