Reconstructing records after a disaster is important for several reasons including insurance reimbursement and taxes. Most importantly, records can help people prove their disaster-related losses. More accurately estimated losses can help people get more recovery assistance like loans or grants.
Whether it’s personal or business property that has been lost or destroyed, here are some steps that can help people reconstruct important records.
- Get free tax return transcripts immediately using the Get Transcript on IRS.gov or through the IRS2Go app.
- Order transcripts by calling 800-908-9946 and following the prompts.
If you are a neat-nick and your tax return for last year has been completed and filed, you are probably thinking about getting rid of the tax records related to that return. On the other hand, if you are afraid to dump old records, you are probably looking for a box to put them in so you can store them away. Well, you do have to keep them for a period of time but not forever.
Generally, tax records are retained for two reasons: (1) in case the IRS or a state agency decides to question the information on your tax returns or (2) to keep track of the tax basis of your capital assets, so that you can minimize your tax liability when you dispose of those assets.
With certain exceptions, the statute of limitations for assessing additional taxes is three years from the return’s due date or its filling date, whichever is later. However, the statute in many states is one year longer than that of federal law. In addition, the federal assessment period is extended to six years if more than 25% of a taxpayer’s gross income is omitted from a tax return. In addition, of course, the three-year period doesn’t begin elapsing until a return has been filed. There is no statute of limitations for the filing of false or fraudulent returns to evade tax payments.
A frequent question we get throughout the year is: How long should I keep records and tax returns?
Here is a helpful guide to follow:
Monthly statements of investments until an annual statement recapping the year’s activity is available, bank statements, copies of checks used for tax deductible expenses and payroll statements until your W-2 arrives and you confirm the information matches. Read More
If you own a small business, you need to keep business records. These can include digital or hard copies. They may contain financial information and licenses. Business record retention is necessary for your annual tax filings. It’s also necessary for potential audits.
What Are Business Records?
You know saving business documents is important. Now, you need to figure out what documents to save. The term “business documents” can refer to many things, including: Read More
You’ve probably heard the expression, “when in doubt, toss it out.” That applies to just about everything except when you’re clearing out tax records!
So, when you’re inspired to clear out those tax files, don’t be too hasty about getting rid of them. Read More
Ever stare at boxes and boxes of files in your garage or your basement and get an itch to clean up? Or are you the sort who pushes these boxes out of sight and is quite happy to let them be? Whichever personality best describes you, you will want to read this before you decide to throw those papers or cover them up with something fancy, call it art and make it a fixture in your basement!
A frequent question from taxpayers is:
How long does the IRS have to question and assess additional tax on my tax returns?
For most taxpayers who reported all their income, the IRS has three years from the date of filing the returns to examine them. This period is termed the statute of limitations. But wait – as in all things taxes, it is not that clean cut. Here are some complications:
You file before the April due date – If you file before the April due date, the three-year statute of limitations still begins on the April due date. So filing early does not start an earlier running of the statute of limitations. For example, whether you filed your 2014 return on February 15, 2015 or April 15, 2015, the statute did not start running until April 15, 2015. Read More