Pastors and other church employees may wonder about how long they should keep personal tax records. If they don’t, they probably should. If they toss records too early, they could be unprepared for the possibility of a surprise audit. Still, how long should employees keep those records? Here’s some common-sense advice worth sharing with church staff—from The Kiplinger Tax Letter:
You should keep your federal returns at least three years. As a general rule, that’s how long the IRS has to question items on your return and to bill you for any additional tax. It’s also the time frame for you to file an amended return and seek a refund. But don’t automatically throw out returns and records after three years. State tax returns may have to be retained longer. Also, look over the old documents to see if you might need any parts of them in the future. For example, hold on to records that help establish your tax basis in real estate. Ditto for investments such as stocks, bonds, and mutual funds. If you made nondeductible contributions to IRAs or after-tax pay-ins to a 401(k), keep records until three years after the accounts are depleted.
This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."
Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.