Once your 2018 tax return has been successfully filed with the IRS, you may still have some questions. Here are brief answers to three questions that we’re frequently asked at this time of year.

Question #1: 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. So you can generally get rid of most records related to tax returns for 2015 (and earlier years) after April 15th, 2019, or October 15th if you filed for an extension on your 2015 return.

However, the statute of limitations extends to six years for taxpayers who understate their gross income by more than 25%. Even if you didn’t do that, if the IRS asserts you did, it will be difficult to defend yourself if you don’t have your records. So we recommend keeping all your records for at least seven years to be safe.

Either way, you’ll need to hang on to certain tax-related records longer. For example, keep the actual tax returns and W-2s indefinitely, so you can prove to the IRS that you filed a legitimate return. (There’s no statute of limitations for an audit if you didn’t file a return or you filed a fraudulent one.) You’ll also need them to correct any mistakes you might find in your Social Security earnings record, which could have happened any time within the last 35 years.

If you have a business or rental property, you need to keep records on anything that still affects future returns. For example, you need to keep the purchase documents on a building until the statute of limitations runs on the last return where you claimed depreciation on it. Ditto for equipment, vehicles and other fixed assets. The same concept goes for rental agreements, ongoing contracts of any sort, etc.

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 (or six) years.

Question #2: 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.

Question #3: 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. So for a 2018 tax return that you filed on April 15 of 2019, you can generally file an amended return until April 15, 2022.

However, there are a few 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 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! 614-418-1775
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