Where do you keep your tax records?

[MrNoodly]

We're supposed to hold onto seven years of income tax records in case we're audited, right? If you are or were self employed (like me) that can be boxes of stuff -- boxes I don't want taking up space in the van. I suppose I have some friends or family that might be willing to cram them away somewhere for me. I certainly don't want to rent storage space. On the other hand, I've never been audited, so maybe I can get away with tossing the records and crossing my fingers.<br><br>What have you folks done?

 

[creationode]

You could take the time out over a marathon of shows or movies to scan all of the paper onto a hard drive and burn it onto dvds.&nbsp; They have some affordable document scanners made just for that.<br><br>Unless you are claiming lots of business expenses and all that, you probably will not be audited.

 

[my_vantasy]

I've been audited twice. Since I have an accountant do my taxes, I called his office and they handled everything. I still keep copies of it all, but now I'm thinking I may not if the accountant has records. Thanks for bringing this up!

 

[TxGypsy]

I have thought numerous times about scanning this mountain of...ahem...papers, but I didn't figure the gov would accept copies.&nbsp; If it is acceptable to give copies and I don't have to have the originals...I'm going to have a heck of a scanning and shredding party.<br><br>Any recommendations on one of those affordable scanners Creationode?<br><br>MrNoodly that is one of those things that is a contributing factor in me still having a house.&nbsp; If I can cure the need for keeping so many boxes of 'important' documents....I'm putting up a for sale sign!

 

[stude53]

<h2><span style="color: rgb(0, 128, 0);"><strong><span style="font-family: arial,helvetica,sans-serif; font-size: medium;">Good Question ... I have a similar problem with tax receipts. I googled, and found this FYI. But I am also going to call the IRS hotline to see if they are keeping up with the times, and will accept digital records.<br><br>Bob</span></strong></span><br><br>Adequate Records</h2><p>The IRS states that companies must retain adequate records. This means keeping track of all of your expenditures that will be written off and maintaining actual physical records in addition to any digital archiving you use. These receipts and documents must be retained for at least three years. During your audit, you may be asked to supply records dating back three years if your deductions are questionable. These documents must be kept safely stored. However, if you lost your records <span class="goog_qs-tidbit-0">due to fire, flooding or a natural disaster, the IRS will accept digital copies.</span></p><div class="section" id="section-3"><h2>Timely Kept Records</h2><p>Keeping a daily business journal is a very effective way to document business expenses. This is particularly important for business travel. The IRS will accept journal entries that show times and dates of travel. If you do not have receipts for purchases greater than $75, if you can prove your track record of being at a certain place at the time the expense was incurred it will help you during the auditing process.</p></div><div class="section" id="section-4"><h2>What Else May Suffice</h2><p>Credit card statements may be used to prove purchases if receipts are not available. The IRS may also accept canceled checks as proof of expenses. However, canceled checks must be accompanied by another form of proof, such as your business journal or other receipts you may have for that time period. You may also need to provide written proof for an expense if its purpose is not clear. For example, a business dinner receipt must be accompanied by a brief explanation of the purpose of that dinner.<br><br></p></div>

 

[toupalumma]

I have my important tax documents in a personal storage unit. I had a relative offer to keep my stuff in her basement, but she's 600 miles from here. So, since I want my stuff near me, I pay the storage rental fee. I can fit everything into the smallest unit available, which is usually a 5 x 5. They rent for $50 to $65 per month in the Denver area. I found a couple of places that even give a senior discount of 10%. I keep my extra clothes, toiletries, and kitchen and bathroom stuff in storage, along with the important tax documents. AND...I am also storing stuff for my two sons who are in prison. To me, it's just a necessary part of my life to store stuff. It's sure cheaper than apartment rent.

 

[MrNoodly]

<strong>"</strong><span style="line-height: 20px;"><strong>These receipts and documents must be retained for at least three years."</strong><br><br>That's better than the seven years I was thinking they wanted.</span>

 

[Pikachu711]

<p>As others have mentioned, having a relative store important tax records as well as other documents stored is important. In my case I have a relative who's offered to store any of my important documents in his home. He's the one family member who's supportive of my future plans. All it will take is a phone call from me and he'll have any important documents sent to me.</p>

 

[yesican]

Don't ever think you won't be audited.&nbsp; If you are conservative and frequent conservative sites on the net, your chance of being audited has increased greatly.&nbsp; I was audited 2010 and 2011.&nbsp; I worked for a non profit for 3 months in 2010 where I was considered self employed for a job I did part time&nbsp;for the agency above and beyond my regular hours. It gave me an extra $150/month.&nbsp; My income was not much more than poverty level. In 2011, I worked for wages only and did simple tax return with no deductions other than personal deduction and I was audited again.&nbsp; I use an online tax program.&nbsp; When it comes to big brother, CYA.

 

[Zil]

I file my taxes on line with a copy on my drive plus backup.<br>Reciepts are scanned and stored also.<br>You keep these records for your protection. The IRS sent me a copy of my file with a demand for money.