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Records You Should Keep
Income
& Losses - Retain: 5 years
 Form W-2s (salaries and wages)
Form W-2Ps (monthly pension
distributions)
1099 (self-employment income,
royalties, lump sum payments, capital gains and losses)
Schedule K-l (income and losses from
partnerships and trusts)
Housing
Form 1098 (mortgage interest). Retain:
5 years
Receipts showing capital improvements
you've made to your home.
Retain:
Forever or 5 years after the sale of the property
Rental Property Expenses
Real estate tax bills. Retain: 5
years
Itemized receipts for repairs and maintenance.
Retain: 5 years
Escrow documents to backup
depreciation deductions. Retain: 5 years after the sale of the property
Interest
Paid
Copies of promissory notes. Retain:
5 years after note is paid off
Year-end credit-card statements. Retain:
5 years
Dependent-Care
Payments - Retain: 7 years
Cancelled checks and statements from
baby-sitters or childcare organizations, plus proof of the care provider’s
taxpayer identification number, if a tax credit has been claimed for such
expenses.
Taxes
Copies of all federal, state and local
returns. Retain: Forever
Tax bills and receipts. Retain: 5
years
Charitable
Contributions - Retain 5 years
Receipts (or a diary) for all
donations
Professional appraisal report for any non-cash
item over $5,000
Written acknowledgment from the
charity for contributions of $250 or more
Business
Expenses - Retain: 5 years
For business expenses less than
$25-taxis, tolls, parking fees, etc.-a simple listing in a log or diary will
do. For expenses $25 or more, save
actual receipts.
Credit card receipts and ticket stubs
(annotated with the business purpose of the expense)
Driving log showing where you started
and ended your trips, the mileage and the purpose of the trip
Medical
Expenses - Retain: 5 years
Doctors', dentists' and hospital bills
Prescription receipts
Receipts for travel and lodging
expenses incurred while seeking treatment
Miscellaneous
Expenses - Retain: 5 years
Unreimbursed business expenses, union
dues, investment advice and more
Generally you
should save both your tax returns and all your supporting documents for at
least five years after you file. Actually, if you have the space, never
throwing away tax information (or at least the tax returns themselves)
probably is a good idea, since there is no statute of limitations on an IRS
audit if they allege possible fraudulent filing. The retention times indicated here are in
reference to Federal Returns only. State regulations will vary.
To receive the Advisory by e-mail,
please send your address to lacie@taxplanning.com
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