(UPDATE: The giveaway is now closed. We have our winner! See the comments for more info.)
It’s end of our Back To School 2014 series!
Now that you have all of this great information about tax credits, deductions and other tax breaks, you’re set for the tax year. The key to supporting those claims is to keep great records.
Here are some tips to help you figure out which records to keep and how long to keep them:
- As a rule, keep your tax records and supporting documentation until the statute of limitations runs for filing returns or filing for refund. For most taxpayers, that means that you’ll want to keep those records for three years following the date of filing or the due date of your tax return, which ever is later. So, for example, if you file your 2014 tax return on Tax Day, April 15, 2015, you’ll want to keep those returns and those records until April 15, 2018.
- If you don’t report all of the income that you should report (generally, if you omit more than 25% of the gross income shown on your return), the statute of limitations is extended. You’ll want to keep those records for six years.
- If you file a clearly fraudulent return or if you don’t file a return at all, the statute of limitations never actually runs. In that event, you’ll want to hold onto your records, well, for forever (really, it’s much less work to simply file).
- Supporting documentation for your tax returns includes not only your forms W-2 and 1099 but also bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
- If you claim depreciation, amortization, or depletion deductions, you’ll want to keep related records for as long as you own the underlying property. That includes deeds, titles and cost basis records. Similarly, if you claim special deductions and credits, you may need to keep your records a little longer than normal (for example, if you file a claim for a loss from worthless securities or bad debt deduction, you should keep those records for 7 years).
- If you have employees, including household employees, keep your employment tax records for at least four years after the date that payroll taxes become due or is paid, whichever is later. This should include forms W-2 and W-4, as well as related pay information including benefit forms.
- You’ll want to keep your records organized – I recommend arranging them by year – and store them in a safe place.
- To save space (and quite possibly, your marriage and/or sanity), you can scan your records and store them electronically. The IRS has accepted scanned receipts since 1997, a policy that was memorialized by Rev. Proc. 97–22 (downloads as a pdf). You just need to ensure that your scanned or electronic receipts are as accurate as your paper records and you must be able to index, store, preserve, retrieve, and reproduce the records. In other words, you need to have your records organized and be able to produce them in a hard copy form if needed.
A quick word of warning: even if records aren’t needed for tax reasons, you may need them for other reasons. Make sure that you check with your mortgage company and tax professional before tossing important records.
But the records that you don’t need? When you’re done, you’re done… You don’t need to keep them (if you’re still worried, then keep electronic copies). But the paper copies can go – which is a good thing because you don’t want copies of your financial records around where they can be lifted or used to steal your identity.
And that brings us to today’s giveaway: The Fellowes M-12C shredder is perfect for college students who need to clear clutter while also taking steps to prevent identity theft. As the most at-risk group for identity theft, college students need to remember that shredding is a crucial step for identity theft protection.
The Fellowes M-12C shredder’s slim profile design and innovative technologies make it a great choice for dorm-room and apartment use. Features include:
- Cross-Cut blades that destroy 12 sheets of paper into approximately 302 particles per sheet for greater security
- SafeSense® Technology which automatically disables the shredder when hands touch the paper opening
- The ability to shred credit cards, paper clips, staples and junk mail for added convenience
- A 5 minute run time before automatic cool down
To enter to win, just answer this question: If you could assume someone else’s identity for the day, who would it be? I’ll go first: Amal Alamuddin.
Entries must be posted in the comments section for this blog post in the space below by 10:00 p.m. EST on October 3, 2014. It’s just that easy. I’ll choose one winner randomly (using a number generator) out of all of the qualifying entries.
Be sure and read the fine print for more rules because, as you know, I’m a lawyer and I like rules:
- Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts. If you have difficulty registering, please send an email to email@example.com and copy me (firstname.lastname@example.org) so that I can help if I need to/can.
- I love my Twitter followers and my Facebook fans but for this particular giveaway, tweets and Facebook comments will not be counted. Ditto for emails. You must leave your comment on the blog at this post.
- You can enter as many times as you like but you must leave a different answer each time you comment.
- Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest. Similarly, pingbacks and other links will be disregarded for purposes of the contest.
- I will need your full name and your email address: be sure to use your real information when you register to leave a comment. I won’t publish your email address but I do need contact information for the winning entry. If you win and I can’t reach you, it’s a forfeit.
- Due to shipping considerations, you must have a valid United States address. Sorry, Canada, eh?
- I respect your privacy and I will not send you anything unrelated to your entry in this contest. By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
- Like Judge Judy, my determination is final.
- Prizes are provided directly by our sponsors and are not exchangeable or redeemable for other prizes. Sponsors do not pay for placement and do not receive any compensation for contributions – neither do I! I have no affiliation, paid or otherwise, with any of our sponsors.
- If you aren’t allowed to participate in giveaways because of the laws in your state or your age or an agreement you’ve made with your mother, consider this giveaway not applicable to you. In other words: void where prohibited or restricted.
Comment away! And thanks for participating in Back To School 2014!