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09-20-2015, 08:41 PM
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#1
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gone traveling
Join Date: Oct 2007
Posts: 1,135
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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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09-20-2015, 08:48 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,350
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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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09-20-2015, 09:53 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,934
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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?
__________________
And if I claim to be a wise man, it surely means that I don't know.
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09-20-2015, 10:01 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
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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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09-21-2015, 12:11 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Aug 2014
Location: Red Rock Country
Posts: 1,932
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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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09-21-2015, 06:04 AM
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#6
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Full time employment: Posting here.
Join Date: Sep 2011
Location: Bushnell
Posts: 607
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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.
Sent from my iPhone using Early Retirement Forum
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09-21-2015, 06:28 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Bernalillo, NM
Posts: 2,717
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I'm planning on scanning most the old returns before I shred them.
__________________
"We live the lives we lead because of the thoughts we think" ...Michael O’Neill
"We can cannot compel others to do our will" ....Norman Goldman
"There never is shortage of the gullible to accept the illogical"...Anonymous
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09-21-2015, 06:37 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,698
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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.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.
"I want my money working for me instead of me working for my money!"
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09-21-2015, 07:07 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Houston
Posts: 1,448
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Scan to PDF, backup the hard drive, shred the hardcopies.
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09-21-2015, 07:19 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Feb 2009
Location: Cville
Posts: 1,604
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Quote:
Originally Posted by aaronc879
...
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.
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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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09-21-2015, 12:26 PM
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#11
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Recycles dryer sheets
Join Date: May 2014
Location: Yuma AZ
Posts: 274
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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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09-21-2015, 02:19 PM
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#12
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Recycles dryer sheets
Join Date: Sep 2007
Posts: 193
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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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09-21-2015, 02:31 PM
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#13
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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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.)
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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09-21-2015, 03:04 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,895
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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.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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09-21-2015, 03:48 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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I purged my paper records when we moved and keep the last four years (currently 2011 to 2014, inclusive).
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-21-2015, 05:48 PM
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#16
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,362
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Quote:
Originally Posted by soupcxan
Scan to PDF, backup the hard drive, shred the hardcopies.
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This is what I have done for many years.
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09-21-2015, 05:59 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Nov 2012
Location: Madeira Beach Fl
Posts: 1,403
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Keep the minimum, but make sure you know the basis of your retirement accounts before shredding.
__________________
_______________________________________________
"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
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09-21-2015, 06:01 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
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Quote:
Originally Posted by frayne
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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Incorrect.... that is only if they can prove fraud.... no fraud, then they have a time limit...
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09-21-2015, 06:55 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 3,804
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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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09-22-2015, 12:31 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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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.
__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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