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.
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