What files and how long?

[Thalermade]

It is that time of the year while filing income taxes that LOML and I have our yearly disagreement on what we need to keep. As a compromise, I currently store 15 years worth records and receipts concerning everything related to running a household.

What do you guys save and for how long?

thanks

Russ

[Jeffrey Schronce]

For simple, personal tax records the IRS can only go back a max of 3 years from when the tax was due or filed. There is no time limitation on failing to file, fraud or false information. I assume that you do not fall into one of those. State guidelines are different than IRS. PA requires record retention for 4 years. IRS guidelines for business record retention is generally 4 years. Business owners remember other government entities may require longer retention, such as recording keeping for retirement plans, etc.

If you are talking tax records, 15 years is over kill. 4 is fine, 7 is plenty. Don't forget to recycle and/or dispose of those records very carefully. ID theft would be a slam dunk with typical tax info.

[Thalermade]

Yeah we fall into the simple category. No side businesses.

One worry she has is the capital gains thing on selling houses. I don't really think it applies to us.(and can't convince her otherwise) We moved 9 1/2 years ago into our current house, after owning our first house for 10 years. LOML thinks we need to keep everything just in case...

I have a paper shredder that seems to be hungry.

thanks
Russ

[Jeffrey Schronce]

The IRS is pretty cool on this. The IRS does not tax capital gains of up to $250,000 for single and $500,000 for married folks selling their primary residence. You can use this tax break as many times as you want. Promise.

[Jeffrey Schronce]

Feed the beast!

[scorrpio]

Just how much volume do those records take up, anyway? If this means an extra filing box on a shelf in the basement, I'd rather keep the piece of mind of having those on hand.

[crokett]

Russ,

I asked my accountant this question last Friday. I have tax records going back 10 years. What he says is the IRS will ask for whatever records you have but you are only legally required to keep them for 3, assuming as noted below they are simple personal records. Business records is 7. So if you have records going back 15 years and are audited tomorrow, then you are required to produce all 15 yrs worth. I asked what he does. For his business he keeps the 7 years. Personally he keeps 5. I am going to clear everything out till 5 years ago.

[Ed62]

you are only legally required to keep them for 3 (years)

It's long been argued that income taxes are not legal at all. Has anyone ever seen a law that says you *have to pay income taxes*(with the exception of corporations)? Yeah, I know you'll probably go to jail if you don't, so that's why I've always filed.

Ed

[Thalermade]

I have found tax records and bank records - as early as 1986 (married in 1987).

The biggest thing I need to weed out are cancelled checks and check registers, they are bulky. The plan is to save the IRS stuff, so hopefully it will only take up one file box on the storage shelf. Want to know how much daycare was in 1994?

LOML is not good with dispensing of little used items. She buys new holiday decorations, but can't part with the old ones..... and so it goes, or should I say, and so it STAYS!!

Thanks everyone. Now I also have to clean up the shop some as well.

Russ

[crokett]

LOML is not good with dispensing of little used items.

Does she do the billing? How often is she going to check that checks from the 1980s are still in the closet? If they aren't there will she divorce you over it? If the answer to any or all of those is no, just I'd quietly dispose of them and wait for her to notice.