G.R. Starbuck & Co., PA
Leawood Executive Centre I
4601 College Boulevard
Suite 160
Leawood, KS 66211
Email: info@grstarbuck.com
Telephone:
913.451.8777
877.742.4108
Fax:
913.451.8992 |
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Summer, 2007
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Income
Tax Returns and Related Items: Keep all federal and state income tax
returns and supporting documents (i.e., those items confirming your income
and/or deductions) for a minimum of three years after the later of filing
due date or date filed. The more prudent route is to keep these returns and
documents for six years. Why? The
IRS
can assess additional taxes within three years of its filing date, but if they determine that a
substantial amount of income has been omitted from the return, they have up to six years in which to make a tax assessment.
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Mailing
Receipts: Keep with your file copy of each tax return the U.S.
Postal Service receipt (e.g., the registered mail receipt or certificate of
mailing) showing the date the return was mailed. If your return is filed
electronically, keep a copy of the electronic filing confirmation with a
printed copy of the return. In the event the return is misplaced or lost,
this documentation will save you from late filing penalties. |
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Residential
Property Records: Keep settlement statements from all home purchases and sales in a safe place. In addition, keep records of the
amounts that you spend for home improvements with this file. These records
will provide documentation of your basis in the house if and when it comes
time to compute your taxable gain. You cannot rely on current tax laws when
determining what records might be needed in the future. |
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Stock
and Bond Records: Keep records of your investment purchases (e.g., stocks, mutual funds, and bonds). Besides providing you with a date for
determining the type of gain, long-term versus short-term, these records
establish your basis in the investment and help to compute the gain/loss
when you sell. In addition, keep records that show a return of capital on
your investments. If you reinvest dividends, these records are needed to
show the increase in basis. Records of stock splits are needed to support
the shares owned.
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Depreciation
Records: For any rental real estate or depreciable business property
that you own, keep documentation to support the property’s cost and purchase date, along with the
method used to calculate depreciation and a schedule of prior depreciation
claimed. Maintain these records until you
sell or dispose of the property. Once you sell the property, keep these
records with the tax return on which you report the sale.
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Personal
Records: Keep a permanent file of personal records (e.g., divorce
agreements and copies of estate and gift tax returns under which you
received property) since they can provide a basis for determining your tax
liability when you dispose of the property.
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Other
Records: There are other situations in which you will benefit from
keeping records. For example, nondeductible contributions to an IRA or Roth
IRA, maintaining records of these contributions will facilitate proving your
tax liability when funds are withdrawn from the IRA.
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In closing, the
general rule is: When in doubt about a document, keep it or call us before you
throw it out.
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