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Bankrate's 2009 Tax Guide
Filing & refund
Get it done right the first time with this advice on free filing, e-filing, documentation and refunds.
 
Records to keep
Records the IRS says to keep - and for how long


Basic records are documents that everybody should keep. Although the Internal Revenue Service doesn't require you to keep your records in a particular way, it does urge taxpayers to keep them "in an orderly fashion" and in a safe place.

Basic records
FOR items concerning your ... KEEP as basic records ...
Income Form(s) W-2
Form(s) 1099
Bank statements
Brokerage statements
Form(s) K-1
Expenses Sales slips
Invoices
Receipts
Canceled checks or other proof of payment
Home Closing statements
Purchase and sales invoices
Proof of payment
Insurance records
Form 2119 (if you sold a home before 1998)
Investments Brokerage statements
Mutual fund statements
Form(s) 1099
Form(s) 2439

How long you should hang on to records
IF you ... THEN the period is ...
Owe additional tax and the next three situations below do not apply to you 3 years
Do not report income that you should and it is more than 25 percent of the gross income shown on your return 6 years
File a fraudulent return No limit
Do not file a return No limit
File a claim for credit or refund after you filed your return Later of 3 years or 2 years after tax was paid
File a claim for a loss from worthless securities 7 years

Also keep in mind that while the basic IRS review period is three years, there are exceptions -- in the tax collector's favor.

If the agency suspects you've underreported your income or has questions about a worthless stock write-off, look out. When examiners believe you've shorted your income amount on a return by 25 percent or more, they can come asking questions up to six years later. Add another 12 months for queries about that bad investment.

More details on tax record keeping are available in IRS Publication 552, Recordkeeping for Individuals.

-- Updated: Jan. 12, 2009
 





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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