Category Archives: Record Keeping Tips

When Can You Dump Old Tax Records?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on by

disposing of old tax recordsTaxpayers often question how long records must be kept and the amount of time IRS has to audit a return after it is filed.

It all depends on the circumstances! In many cases, the federal statute of limitations can be used to help you determine how long to keep records. With certain exceptions, the statute for assessing additional tax is 3 years from the return due date or the date the return was filed, whichever is later. However, the statute of limitations for many states is one year longer than the federal limitation. The reason for this is that the IRS provides state taxing authorities with federal audit results. The extra time on the state statute gives states adequate time to assess tax based on any federal tax adjustments that also apply to the state return.

In addition to lengthened state statutes clouding the recordkeeping issue, the federal 3-year rule has several exceptions:

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Year End Tax Planning Issues

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on by

Year-end Tax ReviewYear-end is rapidly approaching as are the holidays. So before you become distracted with the seasonal celebrations, it may be in your best interest to consider year-end tax moves that can benefit you for both 2022 and 2023.

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Read This Before Tossing Old Tax Records

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on by

disposing of old tax recordsNow that your taxes are complete and filed for the year, you are probably wondering what old tax records can be discarded. If you are like most taxpayers, you have records from years ago that you are afraid to throw away. To determine how to proceed, it is helpful to understand why the records needed to be kept in the first place.

Generally, we keep “tax” records for two basic reasons: (1) in case the IRS or a state agency decides to question the information reported on our tax returns, and (2) to keep track of the tax basis of our capital assets so that the tax liability can be minimized when we actually dispose of the assets.

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When Can You Dump Old Tax Records?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on by

disposing of old tax recordsTaxpayers often question how long records must be kept and the amount of time IRS has to audit a return after it is filed.

It all depends on the circumstances! In many cases, the federal statute of limitations can be used to help you determine how long to keep records. With certain exceptions, the statute for assessing additional tax is 3 years from the return due date or the date the return was filed, whichever is later. However, the statute of limitations for many states is one year longer than the federal limitation. The reason for this is that the IRS provides state taxing authorities with federal audit results. The extra time on the state statute gives states adequate time to assess tax based on any federal tax adjustments that also apply to the state return.

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