Basic records are
documents that everybody should keep. Although the Internal Revenue
Service doesn't require you to keep your records in a particular way,
it does urge taxpayers to keep them "in an orderly fashion" and in a
Here is the IRS
list of basic records:
FOR items concerning your ...
KEEP as basic records ...
checks or other proof
and sales invoices
2119 (if you sold a home
here's how long the
IRS suggests you hang onto them:
IF you ...
period is ...
Owe additional tax and situations 2, 3 and 4 (below) do not apply to you
not report income that you should and it is more than 25 percent of the
gross income shown on your return
File a fraudulent return
not file a return
File a claim for credit or refund after you filed your return
Later of 3 years or
2 years after tax
File a claim for a loss from worthless securities
Also keep in mind
that while the basic IRS review period is three years, there are
exceptions -- in the tax collector's favor. If the agency suspects
you've underreported your income or has questions about a worthless
stock write-off, look out. When
examiners believe you've shorted
your income amount on a return by 25 percent or more, they can come
asking questions up to six years later. Add another 12 months for
queries about that bad investment.