So tomorrow is the deadline for filing your taxes in the US. But now that you have compiled all the information how to store it? Do you stuff them back in a box and hope that you can find them if you are ever audited?
The IRS website suggests the following:
After you file your taxes, you will have many records that may help document items on your tax return. You will need these documents should the IRS select your return for examination. Here are five tips from the IRS about keeping good records.
Normally, tax records should be kept for three years.
Some documents — such as records relating to a home purchase or sale, stock transactions,
and business or rental property — should be kept longer.
In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on the IRS website at http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).
I personally suggest that you use the seven-year rule: By using this rule anything 2009 or earlier. – You can shred this year. Since this the tax year for 2016.
Did you know that you can scan your documents and store them on a zip drive? Well, you can. Because the IRS actually does accept scanned documents?
They’ve actually accepted electronic documentation since at least 1997 when they issued IRS Revenue Procedure 97-22, which states:
This revenue procedure provides guidance to taxpayers that maintain books and records by using an electronic storage system that either images their hardcopy (paper) books and records, or transfers their computerized books and records, to an electronic storage media, such as an optical disk. Records maintained in an electronic storage system that complies with the requirements of this revenue procedure will constitute records within the meaning of § 6001 of the Internal Revenue Code.