Jack Woods

 

Central Business Solutions 

301 Lynnfield Street, P.O. Box 3169 Peabody, MA 01960

 

Phone:  978-532-0266

Fax:      978-532-9105

 

1147 Main Street, Suite 213, P.O. Box 299 Tewksbury, MA 01876

 

Phone: 978-851-8044

Fax:     978-851-9332

 

Email: jack@cbps.com

November 2019

Keep Them or Dump Them?

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How long should you keep your business income tax records?


RULE OF THUMB

In most cases, three years should be sufficient, according to the IRS. However, this statute of limitations goes out the window if you don’t report more than 25% of your gross income on a return, file a false return or don’t file at all. You must keep your records indefinitely in the latter two cases.


ODDS AND ENDS

Keep tax records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later. If your business owns property, keep your records until the period of limitations expires for the year in which you disposed of the property.


Other terms apply for non-income taxes, such as employment taxes. Work with your tax professional to make sure you follow the rules and keep the records you may need in case Uncle Sam wants more information from you.


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