Your taxes are filed, and all that pesky paperwork is stored away. But even with April 15 behind us, it doesn’t mean you won’t have questions in the coming days or weeks.
Here are brief answers to the most common questions that pop up soon after filing day.
What tax records can I throw away now?
At a minimum, keep tax records related to your return for as long as the IRS can audit your return or assess additional taxes. In general, the statute of limitations is three years after you file your return. That means you can probably get rid of most records related to tax returns for 2015 and earlier years.
However, if you filed an extension for your 2015 return, keep your records until at least three years from when you filed the extended return. Also, keep in mind that the statute of limitations extends to six years for taxpayers who understate their gross income by more than 25%.
You’ll need to hang on to certain tax-related records longer. For example, keep the actual tax returns indefinitely, just in case you need to prove to the IRS that you filed a return. There is no statute of limitations for an audit if you didn’t file a return or filed a fraudulent one.
If you own stocks and bonds, retain detailed records of purchases and sales. These records should include dates, quantities, prices, dividend reinvestments, and investment expenses, such as broker fees. You should retain these records for as long as you own the investments, plus the three-year statute of limitations for the relevant tax returns.
When it comes to retirement accounts, keep records associated with them until you’ve depleted the account and reported the last withdrawal on your tax return, plus three years. (We recommend you keep these records for six years to add extra peace of mind). And keep records related to real estate or investments for as long as you own the asset, plus at least three years after you sell it and report the sale on your tax return.
Where’s my refund?
The IRS has an online tool that can tell you the status of your refund. Go to irs.gov and click on “refund status” to find out about yours. You’ll need your Social Security number, filing status, and the exact refund amount.
Can I still collect a refund if I forgot to report something?
In general, you can file an amended tax return and claim a refund within three years after the date you filed your original return or within two years of the date you paid the tax, whichever is later. That means for a 2018 tax return that you filed on April 15, 2019, you can generally file an amended return until April 15, 2022.
However, there are opportunities when you have longer to file an amended return. For example, the statute of limitations for bad debts is longer than the usual three-year time limit for most items on your tax return. In general, you can amend your tax return to claim a bad debt for seven years from the due date of the tax return for the year that the debt became worthless.
We can help
Contact us at KraftCPAs if you have questions about tax record retention, your refund, or filing an amended return. We’re available all year long — not just at tax filing time.