Not yet registered? Create a OverBlog!

Create my blog

How long should I keep records? (copies of tax returns)

Each country has its own system and rules for personal and business tax. However, most seem to follow a pattern set by the UK and USA when it comes to tax record retention requirements. It is best to check with the IRS services in your own country.

Personal Tax Returns

Standard returns
In both the UK and US, it is recommended that personal tax records information is kept for a minimum of three years. This applies as long as there is nothing unusual or contentious in the return. For example, if you accidentally file an incorrect return, you should retain all records, including papers such as paycheck stubs etc., until the errors have been fully resolved. Online filing
Both governments, UK and US, now offer the facility to file returns online, and the associated websites offer advice on the best ways of doing this. However, when it comes to identifying advice for any of the more complex problems, it can be a tricky process getting the correct answers. For this reason, if it is at all possible, you should retain your submission information indefinitely.

Business or Company Returns

More complexity in business
Naturally, tax matters for even a small business are more complex than personal returns and keeping records of taxation is no exception. In the UK, all financial records associated with a business must be retained for a minimum of seven years. Payroll record retention is the same and records of past employees should be held for a similar period. IRS Records
The US requirements to keep company records are very similar. Although the official IRS website states that business records need only be kept for three years, it then goes on to list a large number of exceptions. These include any return with a query or claim for a refund. Most tax experts prefer keeping all records for a minimum of six years, if not indefinitely. Expert advice
Although many people find managing their returns an uncomplicated, if tedious chore, it is wise to consult an expert in the field if there is anything unusual about your claim. Fixing the issue at the start can save a very long headache in the future.

Same category articles Taxation

Where to find a salary tax calculator

Where to find a salary tax calculator

If you are working and receive a salary from your employer, it is important to have an idea on the tax deductions to your salary in order to ascertain your take home pay. You can be guided by an online free tax calculator found on the government tax authority website or financial institutions.
All about: UK income tax

All about: UK income tax

The basic rate of UK income tax is 20% in 2011/12, but higher rates of 40% or 50% may apply to higher earners. Some tax deductions and allowances are available. Learn more in this article.
How to use the nanny tax calculator service

How to use the nanny tax calculator service

Do you hire a nanny to take care of your children? Do you know how to arrange the tax payments by becoming your own employer? Have you ever heard about the nanny tax or the nanny tax calculator service? This article will provide you with the information about these subjects and a guide on how to use the nanny tax calculator.
The reasons for different income tax brackets

The reasons for different income tax brackets

Different income tax brackets are used to ensure that higher income earners make a fair contribution to society. However, higher tax rates reduce the amount of tax that is collected because they take away the incentive to work harder. This article describes the reasons for different income tax brackets.