Once you've filed your 2010 tax return, you may wonder what records you need to keep and how long you need to keep them. Here are some recordkeeping guidelines that will help you keep important papers and minimize the clutter.
TAX RECORDS. Keep tax returns (and any records used to prepare them) for at least three years after you file the return if you have only W-2 and interest income, preferably seven years if your returns are more complex. That's because the IRS can audit your return for up to three years after it's filed - up to six years if you under report income.
If you own property or businesses in more than one state, check the statute of limitations in each state since some are longer than the federal statute. Save copies of the tax returns themselves permanently because you might need information in the returns for other purposes.
HOMEOWNER AND PERSONAL RECORDS. Keep homeowner records (deeds, escrow statements, mortgage and title papers, etc.) at least seven years after your home sells. For household purchases and home repairs, keep receipts and cancelled checks for the warranty period of the item. Before you toss insurance policies, check with your agent. Generally, you'll want to hold insurance policies for the life of the policy plus three years.
INVESTMENTS. Keep monthly or quarterly investment statements until you receive the year-end summary. Save year-end statements and ownership papers until you liquidate the investment, plus seven years. Retain annual reports for IRAs and other retirement plans permanently.
OTHER RECORDS. Important records, including vehicle titles, wills, trust documents, insurance policies, contracts, and birth and marriage certificates, should be kept in a safe place. An inventory of your valuable property, along with photographs or a video, should be made and kept current in the event your house is robbed, damaged, or destroyed.
On May 5th, Alvin Pearlman appeared on the the Fox19, WXIX, Morning Xtra television program, and on the WKRC Simply Money radio program discussing this topic.
