Springtime isn’t just tax time—for many people, it’s also time to do spring cleaning. If you’re looking to clean out your files and get a fresh start, you may be wondering if it’s OK to shred your old tax documents. How long do you have to hold on to your past tax returns and your old receipts before it’s safe to dispose of them? Here’s a handy guide for the curious taxpayer.
Which tax documents should I keep?
The Internal Revenue Service advises taxpayers to keep copies of their filed tax returns for each year indefinitely. You should also keep copies of all of your IRA contributions forever, since you’ll need proof of these contributions in order to claim them as deductions. You’ll want to hold on to the documents for large purchases related to a property, such as buying a home or making major remodels, until it has been at least three years since you last owned the property. If you’re not sure whether you should keep a particular document, ask us.
Which tax documents can I eventually shred?
The tax documents that you can eventually shred are your supporting documents. These include forms such as 1099s and W2s, personal records such as pay stubs and bank statements, and proof of deductible expenses such as medical receipts and charity receipts. For maximum security, be sure to use a cross-cut shredder, which will reduce your documents to small pieces of paper (rather than long strips, which can theoretically be reassembled). Then, soak the shredded paper in water before throwing it out.
How long should I keep my supporting documents?
If you live in Arizona, then you can usually shred the supporting documents for your tax return four years after the date that your tax return was filed. So, if you always file before the April 15 deadline, then on April 15, 2019, you can shred all of the supporting documents for your 2014 tax return. If your 2014 tax return was filed on extension, then you should wait until it has been four years since the date it was filed. You should also hold on to your supporting documents if you have not filed a tax return.
Do I have to worry about being audited after I shred my supporting documents?
The IRS usually does not audit beyond three years, unless it finds that you have filed a false or fraudulent return. There is no statute of limitations on providing false information to the IRS, so it’s important to make sure that you report your information accurately every year. As always, if you are concerned about any aspect of your tax records, talk to your tax preparer.
Are you looking for a professional tax preparer you can trust? If you need help preparing your 2018 tax return, you can turn to us at The Royce CPA Firm! To schedule an appointment at our Tucson office, fill out our online form today.