The IRS has some very specific requirements when it comes to tax return retention. Learn about IRS tax return retention requirements with help from TurboTax in this video on tax tips.
Hello, I'm Jeremy from TurboTax with important news on why you should keep copies of your tax returns.
So, you've finished your tax return and sent it off to the IRS but did you remember to keep a copy for your records? If not, it may come back to haunt you at some point.
The IRS encourages you to hold on to a copy of your tax return for at least three years after you file it. This is the amount of time the IRS has to audit that return and possibly increase the amount of tax you owe.
If this does happen it will be hard for you to defend yourself without a copy of the return but even more important than the tax return are the documents that you use to calculate each item reported on it. This is your proof and without it it's hard to challenge the IRS agent.
Keep in mind that this limitation period increases to six years if you fail to report more than 25 percent of your actual income. This extension applies even when the omission is an honest mistake.
You are subject to the same three year limitation when it comes to claiming a tax refund. If you realize you made an error on a prior return that caused you to overpay your taxes, a lack of proof may reduce your chances of getting a refund.
The good news is when you file with TurboTax, you can print as many copies as you like. If you use our CD or download product, you can store a copy of your return on your computer and if you use our online product, you'll be able to access your return online as many times as you like for three years.
For more tax tips and guidance, visit TurboTax.com.