John M. Hoffman
How long do I need to keep
those tax records?
A very commonly asked question. The statute of
limitations is generally three years. We suggest that you keep an extra two
years making a total of five years.
We suggest that you keep permanent files on any
real estate for as long as you own the real estate and for three years
thereafter. These files should include closing statements on all mortgages and
the discharge of every mortgage when they are paid off (very handy when you go
to sell the real estate).
We suggest that you keep records on investments
from the day you buy them until you sell them (and then for three years). If
your investment house shows the cost basis on your monthly statements, that
We suggest that your tax documents (W-2ís,
1099ís, etc) be organized by tax year, along with your copy of the tax return,
bank statements and cancelled checks. If you keep these records for five years,
every year when you go to add a new year to your storage, you should be able to
discard the oldest. You should include receipts for all items that are taking
deduction for in these stored records. For example, if you claim telephone
expenses as a tax deduction, you need to keep those monthly bills with all these
other documents for the five years.
Donít forget that you should be checking the
reports from social security as to the wages earned and social security taxes
paid on your behalf. Your copy of your W-2 comes in real handy should there be a
Wills, marriage licenses, birth certificates,
social security cards, and passports should be kept in safekeeping. We suggest
either a safety deposit box or at least a fireproof box at your home.