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Old tax returns ?
Old 09-20-2015, 09:41 PM   #1
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Old tax returns ?

Doing a post FIRE cleanup and getting rid of tons of old paperwork. Old pay stubs old bills and such. Why we save that stuff I'll never know. As for tax returns what is conventional wisdom - do we keep prior 10 years and destroy the rest ?

Seems like SSN's were on everything back then.
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Old 09-20-2015, 09:48 PM   #2
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According to the IRS, 3 years is enough most of the time. Maybe 7 years in some cases.

Period of Limitations that apply to income tax returns

Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
Keep records indefinitely if you do not file a return.
Keep records indefinitely if you file a fraudulent return.
Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

I keep everything for 7 years but I guess I don't need to. Maybe i'll re-think that.
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Old 09-20-2015, 10:53 PM   #3
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I keep everything forever. It's just my nature.

Isn't it possible you would need a tax return from 20+ yrs ago to validate your Social Security earnings record?
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Old 09-20-2015, 11:01 PM   #4
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I have 40 years of tax returns around here someplace.... the old one are not where the new ones are, but in a pinch I could find them all...


BUT, I am cleaning up and getting rid of old bills and other junk that I just do not need... also plan to get all tax returns together soon and just get rid of the supporting docs on the old ones.....
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Old 09-21-2015, 01:11 AM   #5
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IIRC, there was a case here in Arizona decided back around 2001 that resulted in tax refunds for improper treatment of dividends in the late 1980's. Because I had my tax old returns for those years, I was able to easily claim the resulting refund which was in the 100s of dollars. After that I tend to keep my old returns although now they are in electronic format such as pdf.
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Old 09-21-2015, 07:04 AM   #6
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I recommend keeping the bare minimum required by law. My father recent died, leaving decades of tax forms, financial files, records of old property sales, etc. It was unnecessary and made it more confusing and time consuming for the executor to settle his estate.


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Old 09-21-2015, 07:28 AM   #7
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I'm planning on scanning most the old returns before I shred them.
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Old 09-21-2015, 07:37 AM   #8
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Until a few years ago, I kept the entire folder for each tax year which included the tax booklets and all the accompanying stuff I got with the 1099s. Then I whittled that 25-year mass of paper down by 2/3, leaving me with only the tax returns, a few key pages from tax booklets, and any worksheets I created to help complete my income tax forms. I also combined several older years which had little extra paper, freeing up many folders.
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Old 09-21-2015, 08:07 AM   #9
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Scan to PDF, backup the hard drive, shred the hardcopies.
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Old 09-21-2015, 08:19 AM   #10
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Quote:
Originally Posted by aaronc879 View Post
...
Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
Keep records indefinitely if you do not file a return.
Keep records indefinitely if you file a fraudulent return.
Just a couple items caught my devious attention:

- So if I keep my records longer than recommended, is that evidence I have filed a fraudulent return ?

- If you didn't file a return, what records are you keeping ? not tax records.
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Old 09-21-2015, 01:26 PM   #11
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Before tossing old tax returns, check you social security statement to ensure that the SS account correctly reflects your earnings and "contributions" for the year.
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Old 09-21-2015, 03:19 PM   #12
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Using ScanSnap to scan fed & state returns & supportive documentation. Then take it to CPA to shred it all. I only keep original wet signature documents & Lasser's Tax Guide. Digitally it all fits easily on an external hard drive in an encrypted format.
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Old 09-21-2015, 03:31 PM   #13
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I have all my tax records ever filed. I'm paranoid. But as pointed out - I was able to use my tax records and w-2's to prove misreporting (under reporting) of SS income/taxes paid.

I don't keep the paper books anymore... I used to. Now it's just the submitted tax forms and the corresponding docs (w-2s, 1099s etc.)
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Old 09-21-2015, 04:04 PM   #14
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Ten years is all I keep. Just FYI, the IRS does not have to abide by any statute of limitations so they can go back to the year Christ was born.
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Old 09-21-2015, 04:48 PM   #15
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I purged my paper records when we moved and keep the last four years (currently 2011 to 2014, inclusive).
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Old 09-21-2015, 06:48 PM   #16
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Scan to PDF, backup the hard drive, shred the hardcopies.
This is what I have done for many years.
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Old 09-21-2015, 06:59 PM   #17
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Keep the minimum, but make sure you know the basis of your retirement accounts before shredding.
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Old 09-21-2015, 07:01 PM   #18
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Ten years is all I keep. Just FYI, the IRS does not have to abide by any statute of limitations so they can go back to the year Christ was born.

Incorrect.... that is only if they can prove fraud.... no fraud, then they have a time limit...
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Old 09-21-2015, 07:55 PM   #19
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I kept all DW paystubs from her 1st and 2nd teaching jobs, as well as all the stubs as from the years of subbing, while staying home with DD and DS. She went back full time after the youngest started school and taught for another 28 years. Amazingly enough, NONE of her earlier time, was never recorded, or even employment status. We moved to another state after 2nd crumbsnatcher was born. If I hadn't kept those eight years of stubs, we would never would have the proof to purchase her past time for the 2nd state's pension plan.
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Old 09-22-2015, 01:31 PM   #20
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After ER, I went through a major office purge and reorganization. Shredded mounds and mounds of paper... bank statements, old bills, canceled checks, expired insurance policies. I now produce and retain almost no paper copies of anything. One thing I did retain is 10 years of tax returns and supporting documents, but only after going through the folders and disposing of stupid stuff like 1099 "instructions" from Fidelity. Older returns were scanned and all paper shredded.
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