When it comes to financial planning, it’s important to keep your financial and other important documents organized. It ensures you have all of the information on hand in a safe place in the event you need documents such as tax returns, billing statements, property tax information, insurance policies, and others.
When it comes to your taxes, it’s a good rule of thumb to keep copies of your tax returns, but how long should you keep them?
Generally, you should keep your tax returns and supporting information (i.e., receipts, W-2 forms, bank statements) for six to seven years. The IRS has three years to audit a return or two years after you have paid the tax, whichever is later. However, if income was underreported by at least 25 percent, the IRS can look back six years, and there is no time limit for fraudulent tax returns.
Our expert wealth advisors are here to share their insights on frequently asked financial planning questions. Feel free to contact us with your financial planning questions or to find out more about how we can help you achieve financial independence, live life by design, and connect your wealth to purpose.
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