Everybody wants to know “how long should I keep records?” Each time I’m asked I refer clients to the IRS’s answer to this question to draw their own conclusions.
Most are surprised to learn that they are keeping tax documents for about 4 years longer than necessary.
They re-read the page, questioning everything they assumed about retention records, then start confidently tossing. After sending this link to a virtual client in Texas, she let go of 8 boxes of old documents! She wanted me to make it clear that each was packed solid. I also had an in-person client in Virginia recently let go of nearly as much in a matter of minutes, after a quick check to make sure her box contents were properly labeled.
Are you keeping tax records too long? Probably. Read the IRS’s surprisingly simple explanation of what to keep, and for how long. Of course there are exceptions to most rules, but read the guidelines carefully before you think you are the exception. I still encourage people to do what it takes to sleep well at night, but the IRS, in this case, makes it pretty easy on us!
Surprised at what you learned? Think you can beat my virtual client in boxes of tax documents eliminated? Share your comments here!