Let’s organize the cupboard –
Records retention, a headache! Most individuals keep piling up their important documents. Neither they can throw them away nor can they keep them forever. But the tower needs to be cleared off.
This is the reason why the question arises, How long should you keep your tax return? This is still undoubtedly a valid question most taxpayers are unaware of.
Well, the ideal period to retain tax return documents is claimed to be a minimum of 3 years. All tax returns and supporting documents must be kept for at least three years from the date of filling up the income tax return. Keeping the documents for seven years as the assessment of additional tax is usually around six years. Undoubtedly, the idea of making the tax assessmemtupto six years, claims to be one of the profitable options to save an individual’s life from future harsh circumstances.
Businesses should mainly consider retention of documents a bit longer. The possible reason could be potential legal matters. The easiest and most secure way to keep your tax records is digital. Scan all your tax return documents and keep these digital files safe and secure forever with you. It not only save your precious space but guarantees to remain safe for a long period.
The time to keep the records safe is the same for all. Whether you are a salaried individual, businessman or professional the time limit to hold on to tax return is similar. Although 3 years have been authorized as the ideal time limit to keep your tax returns, however, soft copies can always help you to preserve your documents longer.
Well, have you ever thought about the reason that, Why it is so important to keep tax return documents safe and secure? If yes, then below are the exact solutions for you or if no then trust me thinking about the same can be a great beneficial option for you.
Let’s explore the reasons to help you learn why preserving tax documents can be a good idea.
- The tax refund documents are essential to file a claim for a refund.
- These are important, especially for retirement accounts.
- Your tax return papers are required by your insurance company or creditor for further future processes.
- You need to keep them safe as ISR typically has the power to audit your returns.
- A substantial tax fraud case may cause additional audit returns.
- To write off debt in case of a loss
- To figure out a gain or loss in selling out a property
Searching for the documents that are required the most for the tax processes?
Well, if yes, then the list of the supporting tax return documents includes – W-2s, 1099s, receipts, cancelled check, credit card statements, bank statement, property-related records and other papers through which you have claimed your tax credits.
Storing tax return documents –
It is one of the most crucial steps to consider. Keeping your documents safe and secure is an important aspect of a safe future. However, there are two ways to keep your legal tax return papers safe i.e. – hard copy and soft copy.
- A hard copy is to be kept in a fire-free case. Along with your other important documents keep these papers in a separate cabinet. Hard copies should be managed efficiently as there might be an inconvenience in locating them in the time of need.
- Soft copy – This way you can save the documents for a longer duration. Also, the internet makes easy these documents easily accessible. Scan the tax return papers and save them in a file on your device. As well as keep a backup of this file in an encrypted hard drive. The digital method is beneficial as the files are easy to manage and also takes less space.
Taking advice from an expert is said to be a great option, thus by going through their codes, it won’t be wrong saying that choosing the option of soft copy acts as one of the finest ways. However, Malik Mullinois one known personality and has an experience of years and thus still believes that saving the soft copies of the tax is one crucial aspect. He declares the fact that keeping the soft copies helps you to preserve your data with ease and within budget.
Discarding tax return documents – think twice before going to the procedure. Check for the last time if you still need these documents or not? Thus, once you are sure of discarding them precede further. The best way to discard them is to shred them. This way your personal information would be kept safe from identity thieves. Hence, shredding reduces the chances of stealing information.
The tax procedure is undoubtedly one of the most hectic procedures, but the fact that can not be denied is its importance. Thus, take your every decision wisely by not letting it compromise with your future. Investment and tax returns need to be go hand-in-hand, where the teachings of Malik Mullino, founder of the well-known organization i.e. https://jadeiteassetsllc.com/ can help you with your every step,