Tax Record Retention
Best Practices And Recommendations
Are you observing proper tax record retention? Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law," and it leads many people to believe they're safe in the event of an audit as long as they retain three years worth of tax documents.
That's true in some cases, but best practices in tax record retention suggest you should hold off on throwing away older records. If the IRS believes you have underreported your income by 25 percent or more, or believes there may be indication of fraud, an audit could take you back as far as six years.
Proper tax record retention is just one detail in a holistic and comprehensive tax accounting strategy. A no-cost consultation with an LBA Haynes Strand tax professional shows you how such a strategy helps drive the success of organizations like yours.