BOSTON (CBS) – Many of us have the mindset that we need to save everything just in case we might need it someday. And then there are those folks who open a birthday card, read it and then throw it away immediately. They don’t keep much of anything.
And, of course, I want you to be right in between the hoarder and the dumper.
A warranty for a crock pot that is 10 years old is really just a keepsake and can be tossed but a warranty for your new TV should be in your files.
Let’s talk about what the IRS expects us to keep in our files. According to the IRS, you will want to keep records that support your income and deductions on your tax return.
They should be kept until the period of limitations runs out which is normally 3 years from when you filed your return. So you need to keep your 2014 tax information at least thru 2018 or longer.
What that also means is until the IRS can audit your return or assess you an additional tax. Or it can work in your favor too; you can also amend your return to claim a credit or a refund.READ MORE: Man In 'Grave Condition' After South Shore Plaza Shooting In Braintree; No Arrests Made Yet
You will want to keep your tax records for at least 7 years if you filed a claim for a loss from worthless securities or bad debt deduction.
If you filed a fraudulent return, basically if you thought you could pull a fast one on the IRS such as not reporting income or decided not to file a return for some reason, you will want to keep your tax information indefinitely. There is no limitation on when they can come after you and often times they are very good at catching you. Computers and banks leave a paper trail.
We all are responsible for paying our taxes. Taxes are the price we pay for living in a civilized society. My advice, report all of your income and take every deduction you are entitled to. You will sleep better at night.
One more thing: A word of advice: When tossing old documents if they have pertinent information like your name, credit card number or Social Security number on them use a shredder or a pair scissors on them before you toss them.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.MORE NEWS: Owners Of 'Short-Staffed' Salem Businesses Complying With Vaccine Mandate Hope New $500 Incentive Attracts Workers
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