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Question and Answer about Taxes

January 31, 2010

QUESTION : Sent in from Kevin | New York, New York
I was wondering if you knew the rules of how long to keep old bills….bank statements… payments …and old tax returns. It’s that time of year to go through all that stuff and it seems everyone has different time restraints for disposal.

Kevin – A new year means the tax man is just around the corner. Funny you ask this question, because I was planning on addressing this same issue in the coming weeks. But now is as good a time as ever.

Usually companies are required by law to have W2’s mailed to their employees by the end of January. This allows people to start getting their receipts and expenditures in order. I use a Quicken spread sheet on my Mac to help organize all my expenses during a year. I usually go to an accountant to help with the more in-depth accounting procedures. If you do them yourself, make sure to read everything carefully and don’t be afraid to ask questions. Some H&R Block centers let you ask questions.

As for your original question, I use a large manila envelope and put all my tax information, receipts and final return stub in it. That’s if I’m lucky and get money back. I keep all this information for a total of 7 years. Six years is the furthest usually the government will ask you for if audited, so better to keep an extra year. GOOD LUCK and hopefully you get money back!

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