At this time of year, many of us are buried in receipts and documents for filing tax returns. But, how long do you need to keep these documents and what is the best way to store them?
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There are many different thoughts and opinions on this, but when you are thinking about documents for tax purposes, your best bet is to follow the guide offered by the IRS. Although there are a number of things that only need to be kept for three years, there are also a lot of things that need to be kept for four years, seven years or indefinitely.
Many tax experts will warn that if you are concerned about being audited, you may want to keep things indefinitely so that you can prove the information that you provided is accurate and that you have not submitted a fraudulent return.
There are a few good ways to hang on to these receipts and documents.
One way is to keep things in a digital format and keep a back up in a safe place. This can create some extra work, but they will keep your documents safe from fading over time, and in case of a fire or flood.
However, you may want to keep the originals of some of your receipts, just in case they are needed in the future for returns, rebates or warranty purposes. Some retailers and manufacturers still require the original receipt.
For information about the IRS' guide for keeping records, you can go to their website
