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Old 01-11-2021, 09:51 AM   #41
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Seems to me that shredding any “evidence” would be advisable.
;-)
Notice to IRS...I’m just kidding.
Right, you could neglect the keep even the most recent 3 years of returns so that no “possible evidence” of fraud be found. But the IRS has their records of what you submitted.
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Old 01-11-2021, 11:32 AM   #42
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I keep them all as PDFs (with multiple backups). I scan all associated paperwork and file those PDFs with the return, one folder for each year. Every piece of paper goes through the shredder. It's trivial to print those old PDFs if I need to, so why bother keeping the originals?

I use the same system. Nowadays I don’t even get a printed copy from most places. I download all my W2/1098/1099/etc and save my submitted 1040 from TurboTax to a pdf. Saves on a lot of paper and scanning.

After that, it’s not a big deal to keep them indefinitely.
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Old 01-11-2021, 11:37 AM   #43
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I keep hard copies of tax records going back to early 80's. No info booklets. I do not have real estate investment except for the house so my taxes are relatively simple. Filled up two boxes. Will get a good scanner to convert to pdf files and get rid of anything older than 7 years.
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Old 01-11-2021, 11:40 AM   #44
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Used to keep 10 years, now only 7.
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Old 01-11-2021, 11:46 AM   #45
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Scanning the additional paperwork is a real pain for me. Fortunately most of the 1099s etc. are available electronically, but there is always something!

I’m really looking forward to getting rid of years worth of medical receipts when we spend down our HSAs.
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Old 01-11-2021, 11:47 AM   #46
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In my case, 3 years.... Max!
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Old 01-11-2021, 11:50 AM   #47
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I had a huge heavy file cabinet and tons of free space so tax files were not an issue.


When we started downsizing a year or two ahead of actually putting house on market I bought a high speed scanner and started digitizing and or shredding everything except for tax files. I also digitized through photos pictures of me with many personal items I had been keeping only for sentimental reasons.



Good thing I had planned ahead since house on market had offers essentially immediately and closed before we actually closed on a new place.


Finally I digitized everything except last year keeping all supporting paper and even my paper worksheets. Now everything is digitized and shredded about every 2-3 months.


Now I keep this years tax return and documentation until after the return is accepted and processed and money refunded if that is to happen.



Somehow i think I have just become a well organized hoarder. : )
Do you make house calls
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Old 01-11-2021, 12:04 PM   #48
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10 years. Only the backup data, returns on line. Not a big issue. One bankers box. Cannot be bothered to image the hard copy receipts.
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Old 01-11-2021, 02:10 PM   #49
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I only keep paper receipts for 3 years, simple 1040-SR and one 1099-B. Medical receipts, property taxes all digital. I have scanned returns from the '80's.
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Old 01-11-2021, 03:40 PM   #50
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I have paper returns going back to 1993 and I have PDF copies of electronic returns starting in 2002. I plan to keep the electronic copies forever, they don't take up any physical space. I do very little scanning, the tax returns and almost all of the documents I keep are generated in electronic PDF format.
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Old 01-11-2021, 04:12 PM   #51
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I have kept all my tax returns but as far as tracking basis for investment I find that to be a pain to file every record of monthly investments and reinvested dividends/capital gains. Doesn’t the brokerage maintain information on your basis?
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Old 01-11-2021, 04:18 PM   #52
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Doesn’t the brokerage maintain information on your basis?
They should, but they have only had to do that for about the last ten years.
And there is always the issue of data being lost when you transfer an account from one brokerage to another, especially in prior years. So it's wise to keep as much of a record as you can.
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Old 01-11-2021, 04:56 PM   #53
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They should, but they have only had to do that for about the last ten years.
And there is always the issue of data being lost when you transfer an account from one brokerage to another, especially in prior years. So it's wise to keep as much of a record as you can.
Right. I closed a credit union account one year, and the following January I got an email that my tax forms were online and ready. Problem is, they closed my account the day I transferred the last money out! I called and they did mail me a paper copy.
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Old 01-11-2021, 05:01 PM   #54
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I've thought about digitizing all my 2020 tax stuff, and telling VG that I'll take E-statements of my 1099s. But I really like checking things off as I record them, and I also think if I died or became incapable that it'd be easier for my son to fill out my last taxes with hard copy statements.
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Old 01-11-2021, 05:54 PM   #55
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They should, but they have only had to do that for about the last ten years.

And there is always the issue of data being lost when you transfer an account from one brokerage to another, especially in prior years. So it's wise to keep as much of a record as you can.


I guess I am just confused about how the process works. When I review my portfolio, it usually shows me from inception including additions and reinvested income. I was hoping this would be sufficient for the IRS. What am I missing?
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Old 01-11-2021, 06:04 PM   #56
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Gosh no. Especially if you own any type of property that has tax consequences (ie IRA's, real estate etc).

The IRS says that you need to keep your records until you have disposed of the property -- even if it is more than 7 years.

-gauss
I think rentals are a major complication. A friend who owns rental properties was subjected to a very rigorous audit- I think he said they went back 30 years on some properties. Thanks to his scrupulous record-keeping and his honesty, he ended up getting a small refund when it was all over.

I have paper files going back to 2012, I think. IMO, it's not all that important to keep copies of the actual returns (although I do)- the IRS has them and can provide copies. To me, the most important records would be the proof of amounts you itemized such as Medical expenses and Property taxes, which the IRS doesn't get with your filing.
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Old 01-11-2021, 06:04 PM   #57
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Oddly enough I don't even know how many years worth of tax returns I have saved in pdf. . . . Hmm.

Another thing to look at I guess.
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Old 01-11-2021, 06:42 PM   #58
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they should, but they have only had to do that for about the last ten years.
And there is always the issue of data being lost when you transfer an account from one brokerage to another, especially in prior years. So it's wise to keep as much of a record as you can.
^^^^ this
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Old 01-11-2021, 06:47 PM   #59
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iRS: "we believe you massively understated your income 5 years ago."

Taxpayer: " you can't prove that, cuz I shredded all the evidence."

IRS: " Not my problem. Here is your assessment of tax penalty and interest."

Granted, these are remote risks but keeping 7 years of tax returns and support should be a minimum for most taxpayers.
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Old 01-11-2021, 07:05 PM   #60
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During my last move, I finally got rid of the really, really old tax returns and just kept the last 7 years. I’ll take my chances that I won’t be audited for anything before 2013.
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