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Tax Records What You Should Keep And For How Long.

Tax payers usually are not sure how long they should keep their tax records. Tax records include tax returns and other documents, such as tax payment receipts and bank statements and several other records.

Tax returns - Audits are a headache if no proper records are maintained. In case of audits, it is always better to keep every tax return filed by you. It may also happen that IRS misplaces or loses the tax returns because they deal with a huge number of returns. You will have to ensure, for your own safety, that your records are kept safe.

If your tax returns are being filed electronically, you must get the copies of the returns sent to you. Other than the tax returns, you will also have to keep other supporting documents at least for a period of six years.

Property records - If you have owned a property for some time now, it is important that you get a filing cabinet to store all the records related to the purchase, mortgage statements and other receipts that you possess for all the investments that are made on the house by you. When it is time to sell the property, these documents are required.

Divorce – If you are applying for a divorce, all your financial documents and tax returns and the supporting documents may be required. You must also keep safely, the divorce agreement copies, all the court related records as well as court orders.

These tax records may never be used by you but it is better to always store them in a safe place, as you cannot predict when you may need them.

You may never actually need to show the tax records to the IRS, but if you happen to be the few unlucky ones on whom an audit is performed, these tax records will be of great help and required.

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