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In the past it was recommended that we keep financial papers and tax records for 7 years. I recently heard that after 3 years financial and tax records should be destroyed. How long do you hold on to financial records & tax reports?
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If you are accused of fraud, the IRS can go back 7 years.

Otherwise, just 3.


t.
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I am not a tax person or a lawyer, but I do know that using 3 or 7 or any other specific number is not the answer. It depends on the records. Some records with regard to realestate need be kept until after you sell the property. In the case of records showing your purchase price, stock dividends, etc. need be kept until a period of years after the investment is sold.

Get professional advice - from someone who knows the law in your state. Probably a tax person is a good place to start.

Gordon
Atlanta
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When I file my taxes, the file folder containing all the documentation including 1099, tax bookets for some investments, etc, etc, is often 1" thick.

I agree that major investments like real estate require that you keep records as long as you own the property and probably for 7 years after you sell.

Generally my practice is to weed my tax file down to copies of returns and the most basic documentation after 7 years.

But other records like bankstatements/checks, broker statements, utility bills, and credit card bills are problematic. They do come in handy for the most obscure reasons to prove ownership, document value, establish time of ownership, etc. My preference is to weed these files rather than simply toss them.
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PDF documents take up very little room. Scan it all then shred the originals.

joe
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PDF documents take up very little room. Scan it all then shred the originals.

And be sure you have a backup copy. A flash-drive should do it.
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My documents archive directory is saved on four drives, I think. My computer, it's TM backup, and at least 2 drives in the Drobo.

OTOH, they're all in the same place, more or less. I really do need to add a cloud backup service.

joe
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I wouldn't gladly make pdf files of all my tax records. Even wit ADF, it would be very time consuming. I wonder if my CPA would share her files?

Count Uptoten
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Didn't people expect the Clintons to have records that were 17 years old during the whitewater thing?
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