These days we’re spending a lot more time at home and for some of us that means undertaking more household projects, including clearing out the clutter. Financial records are one of the things that seem to pile up quickly because we’re never sure what to toss, what to keep and for how long. Here’s a general guideline to help answer those questions.
Income RecordsW-2s, 1099s, and bank and investment statements are all necessary to support the income reported on your tax returns. For itemized returns, be sure to keep canceled checks, invoices, and receipts, too. The statute of limitations for the IRS to assess your tax returns is three years, with exceptions:
Note: The IRS can investigate at any time for failure to file or for filing fraudulent tax returns.
Property RecordsProperty sales can result in a capital gains tax based on the cost basis of that property (exclusions apply for sales of primary residences). Cost basis is calculated by adjusting the actual cost of the property upward or downward based on certain factors, including major structural improvements. Retain receipts for major improvements for at least three years after the sale. Know that if you substantially overstate the cost of the property, the IRS has six years to act.
For rental properties, keep records of investments made in the properties and the depreciations deducted.
Investment RecordsWhile brokerage firms and mutual funds are now required to compute the cost basis of your investments, you’ll want to hold on to confirmations and statements in case you switch brokerage firms or investment advisors.
Paring down the clutter and getting your financial records in order is not only satisfying but it leaves you in good position for when tax time rolls around next year.
I was very proud to be represented by Tony and felt secure at a time I needed a compass to head out of a difficult bind. Confidence in your counsel and a sense of security in understanding how best to proceed are important reasons to consider Anthony Kearns and his team of outstanding lawyers.
Tony was excellent! He was knowledgeable, responsive and on-time. His experience as a County Prosecutor definitely helped our case as he knows how the legal system works and how to navigate. I highly recommend Tony and his office.
Thankfully I found Kearns Rotolo Law and I had a wonderful experience working with Charles Rifici on a difficult divorce/child custody issue. I am so grateful for all the work and guidance he provided. He always took his time and diligently went through all my options with me so I could make the decisions that benefitted my family and I. I will be forever thankful for the top notch services he provided.
In March of 2022 I contacted Kearns Rotolo Law Firm with an urgent problem, Mr. Kearns and Mr. Rotolo contacted me immediately to give me hope as to rectify my problem. The end result was Mr Kearns was able to solve my issue through extreme professionalism, I am very grateful I found Kearns Rotolo Law firm and I would recommend their law firm to anyone that has a less extreme problem or a more complex problem, I am very grateful for their services.
I met with Mr. Kearns yesterday about a devastating situation affecting our family. Mr. Kearns and his entire staff made us feel extremely comfortable and showed our family a compassionate side that gave us comfort in the most uncomfortable of situations. Thank you very much. God Bless.