Now that the federal income tax deadline is in your rear-view mirror, what happens after you file? A lot of taxpayers have post tax-filing questions such as what records should I keep and for how long? The IRS has answers for you.
What Records Should I Keep? Normally, tax records should be kept for three years. You should keep copies of tax returns you have filed and the tax forms package as part of your records. They may be helpful in amending already filed returns or preparing future returns. But some documents such as records relating to a home purchase or sale, stock transactions, IRAs and business or rental property should be kept much longer.
If the IRS suspects you’ve underreported your income by 25 percent or more, it has up to six years to audit your return. Additionally, if you have written off a worthless investment, you should keep those records up to seven years.
Address Change. If you move after you filed your return, send Form 8822, Change of Address, to the Internal Revenue Service. If you are expecting a paper refund check, you should also file a change of address with the U.S. Postal Service.
What If I Made a Mistake? Errors may delay your refund or result in notices being sent to you. If you discover an error on your return, you can correct your return by filing an amended return using Form 1040X, Amended U.S. Individual Tax Return.
IRS Publication 552, Recordkeeping for Individuals, has more details on tax record keeping.
Barry Lisak, EA, is an IRS Enrolled Agent who has operated a tax preparation office for over 30 years. Any questions or comments, please contact [email protected] or 516-829-7283.