How Long to Keep Tax Records and More: A Checklist
Article From: HouseLogic by REALTORS home. partnership agreements are mportant need to keep receipts and documents Your deed and mortgage references. for at least 3 years. payoff statements prove you own Unless you live in a Hollywood your home and have paid off your Hills mansion, you probably don’t mortgage, respectively. have space to store years of tax and Your builder’s warranty or insurance paperwork, warranties, and contract is important if you file a repair receipts related to your home. claim. And sooner or later you’ll need But you need that paperwork to check the CC&R rules in your if you need to prove you deserve condo or community association. the tax deductions you took, to file an insurance claim, or to figure out if your busted oven is still under warranty. To help you organize your Why you need these docs: piles of papers, we’ve created a Most are needed to calculate capital handy checklist of how long to keep gains when you sell. Employment tax records. records help prove deductions. First, a little background on Organizing Your Home IRS rules, which informed some of Why you need these docs: Records Because paper, such as our charts: To document you’re eligible for a receipts, fades with time and takes up • The IRS says you should keep deduction or tax credit in case you’re space, consider scanning and storing tax returns and the paperwork audited by the IRS. your documents on a flash drive, an supporting them for at least three *These deductions are external hard drive, or a cloud-based years after you file the return -- the relevant if you itemize. The standard remote server. Even better, save your amount of time the IRS has to audit deduction has been increased, which documents to at least two of these you. So that’s how long we advise. means fewer people will itemize than places. have in the past. Or, you can consider an app • Check with your state about state such as Smart Receipts, which is income tax records. Most states make available via Google Play and Mac you keep them as long as the federal App Store. Smart Receipts lets you government does — three years. But track your finances, including receipts, Montana wants you to keep them for for yourself or your employer. You five years. And Ohio recommends can choose from default data types you hang on to them 10 years. Yes, an including dates, price, tax, receipt entire decade. Why you need these docs: To categories, comments, and payment file a claim or see what your policy or methods. • The IRS can also ask for records warranty covers. Digital copies are OK with the up to six years after a filing if they IRS as long as they’re identical to the suspect someone failed to report originals and contain all the accurate 25% or more of their gross income. information that was in the original And the agency never closes the receipts. You must be able to produce door on an audit if it suspects fraud. a hard copy if the IRS asks for one. Just sayin’. Tip: Tax season and year’s end are good times to purge files and toss what you no longer need; that’s often when the spirit of organization moves us. When you do finally toss out your home-related paperwork, use a shredder. Throwing away intact documents with personal financial information could put you at risk for identity theft. Why you need these docs: This article provides general For the most part, to prove your information about tax laws and Why you need these docs: eligibility to deduct the expense. consequences, but isn’t intended to You use home sale closing documents You’ll also need receipts for capital be relied upon as tax or legal advice and receipts for capital improvements expenditures to calculate your profit applicable to particular transactions records to calculate and document (gain) or loss when you sell the or circumstances. Consult a tax your profit (gain) when you sell your property. Landlord’s insurance and professional for such advice.
For most tax deductions, you
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