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How long to keep certain financial records has been the age old dillemma
How long to keep certain financial records has been the age old dilemma!
This post is intended to give you some guidelines as to which documents you should save that might be needed for a smoother closing and or jut to make your life simpler.
The most often asked and number one question was: how long to keep tax returns? The answer is not as clear as one would expect. My answer is seven years. The reason that is, because The IRS ha a three years rule to audit your tax returns if they suspect a “good faith error”. Three year error also applies to you, if you discover a mistake in your return and decide to file an amended return to claim a refund. The IRS also has six years to challenge your tax return if they think you under reported your gross income by 25% or more. Hence my reasoning to keep the tax records for seven years!
IRA Contributions records: to me it is clear you need to save them permanently. I would suggest you keep these records indefinitely to prove that you already paid tax in this money or to assure that no one make ... more
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