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How Long Should You Keep Tax Documentation?


Following Florida's statute of limitations is a good rule of thumb for saving all records, though some accountants prefer six to ten years of substantiation. If you want to bequeath property as a gift, however, that's another story.

Tax season officially ends on April 15th. Once you’ve completed your taxes and amassed all your receipts, forms, and statements, what do you do next? What gets kept and what gets tossed?

It is important to save records of any type to substantiate the information reported on tax returns. The IRS is stepping up enforcement, so it is imperative that taxpayers keep their records and receipts handy.

Place your records in files listing the year and the following titles: Income, Expenses, Home, Investments.

It is important to save:

  • Copies of your completed tax returns, attachments, and receipts that verify receipt by the IRS.
  • Records that help identify sources of income including those that: track expenses; determine the value of property; or support any numbers or claims made on your prepared tax returns.

What types of records may affect future transactions? Retaining records that substantiate the value of property is essential if the property may one day be a gift.

This year, step-up (and step-down) in basis will be replaced by Modified Carryover Basis. New rules may severely impact cumulative tax-free exchanges of real property, absent accurate records. The end of tax season is a good time to update estate plans.

Other statements that may affect future transactions include:

  • Investment account statements and home expenses.These are important to keep as long as you own the investments, plus a minimum of three years afterwards.
  • Gifts and inheritances that establish values.

Following Florida’s statute of limitations is a good rule of thumb for saving all records, though some accountants prefer to keep six to ten years of substantiation.

Gilman Ciocia, Inc.’s philosophy is to look at the whole picture - taxes, investments, retirement, insurance, lending, and estate planning, which allows individuals to understand how wise decisions will let them keep more of their money, provide them with a healthy and solid financial outlook, and secure their family’s future.

Tax professionals are kept up-to-date on tax law changes. They can save you time and offer insight on how to use the tax breaks available to you.Gilman Ciocia is a leading provider of federal, state and local tax preparation services to individuals in Florida, New York and New Jersey. Securities offered through Prime Capital Services, Inc. Member FINRA/SIPC. Gilman Ciocia and Prime Capital Services, Inc. are affiliated entities. Neither offers legal advice.To make an appointment with a Gilman Ciocia Tax Professional at an office near you, please call 1-800-TAX-TEAM or visit www.gtax.com. First time customers get 25% off of their tax return.

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