Broker Check

How Long Should I Keep Statements and Records? (The First of a Two-Part Series)

How Long Should I Keep Statements and Records?  (The First of a Two-Part Series)

We get it.  It’s the beginning of the 2016 year and you’re overwhelmed by the prior year’s statements and records.  As your try to collect and organize your documents, you might start to wonder “How long am I supposed to keep these records anyway?”  Then you remind yourself that the dreaded tax season is just around the corner and you better not throw anything out because you don’t want to get an IRS audit and not have the documents to prove your deductions.  What do you do?  Help, the paperwork is overtaking your house.  To start off the New Year right, we at Secure Planning Strategies are here to offer you some basic help so you can get your house and finances in order.  

Let’s first start off by mentioning that tax season is a great reason to keep records because you want to ensure that you’re accurate with your tax reporting.  In addition, you also want to keep the same records so that you can prove what you’re reporting on your taxes in the unlikely event the IRS begins to question your tax return reporting.  For tax deduction purposes, 3 years is a good rule of thumb to consider when keep various supporting documents such as bank statements, credit card receipts, utility bills (for home office deduction) and cancelled checks.  In addition, you will save money when your records are organized because your tax preparer will not spend additional time organizing what you have, which equates to a lower tax preparation bill.  (Please remember that the IRS can ask questions up to 3 years after you’ve filed.  If you decided to conveniently forget to include over 25% of gross income, the IRS is restricted to questioning you to 6 years.  In the event you entirely forget to file, there is no statute of limitations on the IRS coming after you and you are stuck.)     

Come back next week when Secure Planning Strategies discusses other possible reasons for recordkeeping and the timeframes for such document records.   Always remember that when in doubt, either call your tax preparer or wealth management advisor for help before throwing the records out.  If you have any questions or would like to get in touch with a great Certified Public Account or Wealth Management Advisor to help you take your financial stability to the next step, please feel free to contact Secure Planning Strategies at: (248) 827-2580 or e-mail us at: