Keeping Old Tax Records, Tossing Old Tax Files


What to do with those old tax records?

Tax day is behind us and now the question remains, “how long do I need to keep my tax records?” The answer is–it depends on when you can toss old tax files.

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How many years do I keep old tax records?

Do you have old tax records from years ago — 1040 tax records? Are you afraid to throw those old tax files away? Most tax records can be thrown out after the 3-year statute of limitations. At least this is true for the federal taxes. The statute of limitations generally expires 3 years after you file your tax return. Or, if you file before the April due date, then 3 years after the April due date.

What about old tax files for capital assets?

But that is not always the case! Records that prove the basis of your capital assets cannot be thrown away until after the asset is sold. This means if you bought a income property and made improvements, keep the records in a notebook or file of some type. Mark each receipt by date and note what the purpose of the improvement was for. Then keep that information for 3 years after the expiration of the 3 year statute of limitations, for the year of the sale. In other words, once you sell the capital asset, keep the documentation for 3 years after the capital asset sells.

Is the statute of limitation for tax records the same for every state?

For some states the statute of limitations is one year longer then the federal. The federal 3-year statute is extended to six years where a taxpayer omits more than 25% from gross income. So make sure all your tax information is proven and you have substantial documentation. There is no time limit for the IRS to assess tax when a taxpayer files a false or fraudulent return to evade taxes. Even if you discard the back-up records, we strongly recommend that you keep a copy of the tax returns you filed with the IRS for indefinitely. You can scan them and keep electronic copies, just make sure they are readable.

old tax records, old tax filesWatch the video for more info or contact our office for more details.

Did you prepare your taxes yet?

Don’t put off your filing any longer! Please call Alex Franch, BS EA a call at 781.849.7200 for details. Alex Franch is an enrolled agent with the IRS.  Call right away so that we can schedule an appointment, if necessary. You are welcome to meet with someone from our tax team, or you may also book your appointment online. Our team can give you further guidance on when you can discard your tax records. And if you have not filed your taxes? We strongly recommend you call us ASAP. We can still help you, even though the filing deadline is past.

Did you file and not receive your tax refund?

Has yours come yet? Are you still waiting on it? If it has been more than 2 weeks, then we suggest that you call us. It is possible you could have become a victim of tax refund fraud. Call Alex Franch, BS EA a call at 781.849.7200 for details. Alex Franch is an enrolled agent with the IRS. He can help you research what the hold up may be. And, if you did fall victim to identity theft or fraud he can help you file the paperwork necessary to resolve the issue.

Tax Files Sources and Resources


For more information, call Alex Franch at 781.789.7200. WorthTax has locations in Norwell, Dedham, and Weymouth, Massachussetts.
Alex Franch

Mr. Franch is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Mr. Franch is an Enrolled Agent and has eight years of tax preparation experience. He has been serving individuals, families, and businesses for several years with tax and financial planning strategies and is a junior partner with the firm. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA) with a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance.

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