Tax Dictionary – Tax Records
Well-organized records make it easier to prepare a tax return and help provide answers if your return is selected for examination or if you receive an IRS notice.
You must keep records, such as receipts, canceled checks, and other documents that support an item of income, a deduction, or a credit appearing on a return as long as they may become material in the administration of any provision of the Internal Revenue Code, which generally will be until the period of limitations expires for that return:
3 years – For assessment of tax you owe, this period is generally 3 years from the date you filed the return. Returns filed before the due date are treated as filed on the due date.
No limit – There’s no period of limitations to assess tax when you file a fraudulent return or when you don’t file a return.
6 years – If you don’t report income that you should have reported, and it’s more than 25% of the gross income shown on the return, the time to assess tax is 6 years from the date you filed the return.
More from H&R Block
The types of documents you should keep with your tax records include: IRS Forms W-2, 1099 (1099-MISC, 1099-R, 1099-INT, 1099-DIV, 1099-S, 1099-B, 1099-SA etc.), 1098, and receipts for itemized deductions such as charitable contributions, medical expenses, property tax, etc. Keep receipts for health savings account expenditures and college savings accounts withdrawals. Also keep records of tax-deductible retirement savings contributions and Form 1095 to show you had eligible health insurance or proof that you met one of the exemptions.
If you have a business, you should keep records of all income and any business expenses you claim on your tax return
such as equipment purchases, travel expenses, advertising, office supplies, inventory purchased, etc.
If you purchase a home or buy stock or other property for investment purposes, you should hold on to all records regarding the purchase and any upgrades to a property for at least three years after you sell the stock or property.
You can obtain copies of documents such as IRS Form W-2, 1099, etc. from the IRS. Learn more about IRS transcripts and researching your IRS account.
Did someone file a fraudulent return in your name? Get the facts about reporting tax identity theft to the IRS and what you can expect after you report it.
The IRS uses information statements to determine the accuracy of returns. Read the IRS definition and get more insight from H&R Block.
Learn more about Letter 3219B and how to handle an IRS notice of deficiency for your business with help from the tax experts at H&R Block.
Get the facts about the IRS failure to file penalty, which the IRS charges when you don't file your return on time. Good news: You may have relief options.