My General Blog


How Long Should You Keep Your Financial Records

You cannot just take everything with you, but it is mandatory for you to store or scan electronically and save some of the essential documents for future approach and Data and Financial Data Preservation. In case you have loads of personal financial and investments records, then you need to be aware of the time frame, for how long you should keep those documents by your side. Depending on the type of financial records you are dealing with, the time frame is subject to change. Once you are done with the initial stages, you can leave that document behind.

Image result for Data and Financial Data Preservation

For the taxes:

For documents like tax returns, canceled checks or receipts, seven years is the ideal time to consider. The IRS comprises of three years in its hand right form the filing date of your audit for the good-faith errors. This 3years deadline is also applicable in case you discover any mistake in your return and decide to file amended return for claiming a refund. IRS further comprises of 6 years to challenge the return if that thinks you have underreported gross income by around 25% or even more than that. You are free from any time limit in case you fail to file return or a fraudulent return.

More on other documents:

For any IRA contribution records, permanent will be the right track for you to consider. In case, you have come across non-deductible contribution to IRA, it is always mandatory for you to keep those records indefinitely to prove that the tax has already been paid when the final time comes for withdrawing money. For other retirement or saving plan statements, the time might vary from a year to permanently. It depends on the investment value and importance of the saving deals you are working with. The same rule is applicable for the bank records over here, as well.

Leave a Reply

Your email address will not be published. Required fields are marked *