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Chehalem Business Connection
November 2013
Page 12
W
hether you use old-fashioned
manila filing folders, a flash
drive or cloud storage, tax and
personal finance authorities agree on the
importance of saving tax documents and
records. In addition to using the informa-
tion for preparing your next income tax
return, it may come in handy years from
now.
“Your tax data is helpful and often re-
quired in many non-tax financial situa-
tions,” said TaxACT spokesperson Jessi
Dolmage. “For instance, insurance com-
panies, lenders and creditors often use
tax information to verify income and
asset value. Form W-2s can provide
proof of income if your Social Security
benefits are less than what they should
be.”
Information to save for your next tax re-
turn
Organizing and saving information
throughout the year will cut tax return
preparation time and can even save you
money. Save any information related to:
- Income from wages, dividends, in-
terest or business: Forms W-2, 1099, and
K-1, bank statements, brokerage state-
ments
- Deductions and credits (child care
expenses, medical and dental expenses,
business use of home, charitable gifts,
vehicle sales tax, alimony): Receipts, in-
voices, mileage logs, bank or credit card
statements, canceled checks
- Home and property: Closing state-
ments, invoices, proof of payment, insur-
ance records, receipts for improvements
- Investments: Forms 1099 and 2439,
brokerage statements, mutual fund state-
ments
While you don’t need a fancy or high-
tech organizing system, you do need to
keep the information in a secure place.
Consider saving electronic copies to the
cloud or on a backup storage device in ad-
dition to, or in place of, your paper files.
What to keep after filing your taxes and
how long to keep it
Knowing what information to save
and for how long can be confusing. As a
general rule of thumb, keep tax returns
and related documents for at least three
years from the April 15 filing deadline.
- Three years: Tax return forms and
schedules plus all information to support
what you claimed on your return, espe-
cially records related to property, invest-
ments, or business assets (for deprecia-
tion). While there are exceptions, the IRS
has three years to assess additional tax
and audit returns. Three years is also the
amount of time you have to amend your
return.
- Four years: Many income-taxing
states have an additional year to audit in-
dividual returns.
- Six years: Forms W-2, 1099, etc. be-
cause the IRS has six years to contact
you if you’ve failed to report income.
- Seven years: Any information re-
garding loss from worthless securities or
bad debts.
Certain documents should be saved
longer.
“Information related to your home,
property, investments and retirement
plans should be kept indefinitely,” Dol-
mage said. “If you dispose of an asset, be
sure to keep the information for another
three years.”
Business owners should keep tax in-
formation for at least four years. That in-
cludes employment records, gross re-
ceipts, invoices, bank statements, proofs
of purchase, asset records, databases,
emails and even voicemails.
Refer to IRS Publication 552 at
for more information about
tax record-keeping, Publications 583 and
463 provide specific information for
businesses. Visit
to download TaxACT DocVault for free.
Your tax documents, what to keep and what to shred
What to keep after filing your taxes, and how long to keep it, can determine how prepared you are to be audited should the
IRS come knocking on your door.
R
ecent events in the
news have reminded
us that unexpected,
dangerous and stressful situa-
tions can happen anywhere:
on the street corner, at the
grocery store and in the
workplace. While these situa-
tions are often chaotic, there
are steps you can take to
mentally prepare yourself to
handle them better, whether
you are an employee, a busi-
ness owner or manager, or a
bystander.
David Levine, senior vice
president of Optum’s Em-
ployee Assistance Program
and an expert in workplace
crisis response, said that any-
one can take steps ahead of
time to prepare themselves
and their workplace to better
handle a tragic or emotional-
ly disturbing event. He offers
a few suggestions anyone
can try, starting today.
Evaluate your purpose
Those who feel they are a
part of something bigger than
themselves tend to exhibit
higher levels of resiliency
after a tragedy. Workplaces
that encourage volunteerism
and community involvement,
promote work-life balance
and encourage an individ-
ual’s sense of family are po-
sitioned to nurture resiliency.
Find ways to manage your
stress
Stress can contribute to a
host of health issues and can
How to mentally prepare for a crisis in the workplace
When faced with a crisis in the work place it’s best to take a step back, evaluate the issue and find
ways to manage your stress before making any decisions.
Steps you can take to minimize the disruption of a disruptive world
Please read more about Crisis on
page 14
