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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.

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