Get Ready for Taxes: Safekeeping tax records helps for future filing, amended returns, audits

Dec 13, 2019 | Tax

Get Ready for Taxes!

WASHINGTON — With the tax filing season quickly approaching, the Internal Revenue Service wants taxpayers to understand how long to keep tax returns and other documents.

This is the seventh in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated its Get Ready page with steps to take now for the 2019 filing season.

The IRS generally recommends keeping copies of tax returns and supporting documents at least three years. Employment tax records should be kept at least four years after the date that the tax becomes due or paid, whichever is later. Tax records should be kept at least seven years if a return claims a loss from worthless securities or a bad debt deduction. Copies of previously-filed tax returns are helpful in preparing current-year tax returns and making computations if a return needs to be amended.

Safe-keeping records

Tax records should be kept safe and secure regardless of whether they are stored on paper or kept electronically. Paper records should be kept in a secure location, preferably under lock and key, such as a secure desk drawer or a safe. Records retained electronically should be backed up electronically and encrypted when possible. The IRS also suggests scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive, CD or DVD with photos or videos of valuables.

Disposing of records

Tax records contain sensitive data such as Social Security numbers, income amounts and bank account information. Tax documents not properly disposed of can land in the hands of criminals and lead to identity theft. Once past their useful date, records should be disposed of properly. Paper tax returns and supporting documents should be shredded before being discarded. Old computers, back-up drives and media contain sensitive data. Deleting stored tax files will not completely erase them. Using special wiping software ensures the removal of sensitive data.

Taxpayers still keeping old tax returns and receipts stuffed in a shoebox may want to rethink their approach. When records are no longer needed the data should be properly destroyed. More information is available on IRS.gov at How long should I keep records?

This post (IR-2018-232) was originally published here on 11/26/2018.

Photo by Braden Collum on Unsplash

Subscribe to our Accounting, Tax and Business Insights Newsletter

Email Address:
Name(Required)
Privacy(Required)
This field is for validation purposes and should be left unchanged.
Navigating State Tax Nexus

Navigating State Tax Nexus

Introduction The Supreme Court's landmark decision in South Dakota v. Wayfair, Inc. in 2018 transformed the landscape of sales tax compliance across the United States. Prior to this ruling, businesses were required to collect and remit sales taxes only if they had a...

read more
Congratulations Jennifer Wallace

Congratulations Jennifer Wallace

Congratulations to Jennifer Wallace, who is stepping into the role of President of the Atlantic-Cape May Chapter of the NJCPA.  Jennifer has been involved in the leadership of the chapter for many years, and she looks forward to giving back to the profession, the...

read more
Pleasantville Music Shoppe

Pleasantville Music Shoppe

Pleasantville Music Shoppe is one of the oldest mom and pop music stores in South Jersey. My dad, Gaston Ragno, at 20 years old, purchased the business on a handshake and a promise to pay when he could from his boss who wanted to retire. Over the years there were a...

read more
Good News from Social Security

Good News from Social Security

President Biden signed the Social Security Fairness Act into law in January of 2025.  This law will have the effect of increasing the entitlement to Social Security benefits to as many as 3.2 million people who receive public pensions based on employment when Social...

read more
I’ve Been Scammed

I’ve Been Scammed

With luck, those words will never leave our mouths.  The sad truth, though, is that crooks are getting smarter and it’s really hard to know what nefarious scheme they will come up with next.  If you find yourself a victim, can you claim any kind of tax deduction for...

read more