How long to keep 1099 forms

How long do you need to keep all these documents? That varies based on a few factors. For example, California generally has four years to audit a state income tax return. Also, an insurance company or creditor may have different record-keeping requirements. Greene-Lewis says that rule also applies to self-employed and freelance workers with one exception: If you claim the sale of some type of equipment for your business, you will need to keep them until the three-year statute is up after the year you sell it.

And if you file a fraudulent return, the statute never expires. Greene-Lewis says that any records related to retirement accounts should be held for seven years after you withdraw the money. Generally, the IRS recommends keeping all documents that prove how much income you earned and anything that supports credits or deductions you claim.

Your taxes start with how much you made, so keep a record of all the dollars you were paid in a given year. However, you could still need to show the IRS that you were covered. With that in mind, a shoebox with loads of papers or files scattered throughout your hard drive is not a good move. Instead, start a filing system that organizes all your records by year and by category, such as bank statements, income forms and receipts.

You might owe more money. These documents include your name, address, Social Security number and all the information needed to steal your identity, so getting rid of them requires extra attention. Whether you retain paper or electronic documents, ensure they are safe and secure and keep an encrypted back-up.

How We Make Money. David McMillin. Written by. David McMillin writes about credit cards, mortgages, banking, taxes and travel. The limit here could be shifted to two years from the date you paid any due tax, if that date is later than the three-year limit. The three-year audit period and associated record-keeping guidelines apply in standard filing circumstances.

If, however, you don't include all your earnings on your , the IRS gets a longer window to decide on a potential audit, so you need to keep your tax records longer, too.

To deal with any questions, you would need to have those six years worth of tax documents on hand. Sometimes a stock bet doesn't pay off. That's how long the IRS has to come back with questions about your bad investment. The same time frame applies to deductions for a bad debt. There are some instances in which to keep tax records perhaps forever.

Say someone — not you, of course — commits tax fraud. There is no statute of limitations on tax fraud audits. When the IRS suspects someone entered illegal information on a return, it can investigate at any time, not just within the standard three-year window.

You also need to keep documentation of why you didn't file a tax return. Yes, that sounds like trying to prove a negative, but if, for example, you took a year off to take care of a sick relative and didn't earn enough income to require that you file, proof of that will short-circuit a detailed IRS examination of your missing tax year.

W-2 form s. Alimony received. Alimony paid. Property tax assessments. Form nondeductible IRA contributions. Transaction data including individual purchase or sale receipts. Even after the statute of limitation passes and you get rid of supporting documentation, keep a copy of each year's tax return that you file. This includes not just the itself, but also any associated schedules that you sent to the IRS that year. That's how much time you have to claim a bad debt deduction or a loss from worthless securities.

If you paid taxes to a foreign government, you may be entitled to a credit or deduction on your U. If you claimed a deduction for a given year, you can change your mind within 10 years and claim a credit by filing an amended return. You also have 10 years to correct a previously claimed foreign tax credit.

For these reasons, save any records or documents related to foreign taxes paid for at least 10 years. When it comes to investments and your property, you'll need to save some records for at least three years after you sell.

For instance, you should keep records of contributions to a Roth IRA for three years after the account is emptied. You'll need these records to show that you already paid taxes on the contributions and shouldn't be taxed on them again when the money is withdrawn.

Keep investing records showing purchases in a taxable account such as transaction records for stock, bond, mutual fund and other investment purchases for up to three years after you sell the investments. You'll need to report the purchase date and price when you file your taxes for the year they're sold to establish your cost basis, which will determine your taxable gains or loss when you sell the investment.

Brokers must report the cost basis of stock purchased in or later, and of mutual funds and exchange-traded funds purchased in or later. But we recommend maintaining your own records in case you switch brokers. If you inherit stocks or funds, keep records of the value on the day the original owner died to help calculate the basis when you sell the investment. If you inherit property or receive it as a gift, make sure you keep documents and records that help you establish the property's basis for at least three years after you dispose of the property.

The basis of inherited property is generally the property's fair market value on the date of the decedent's death. For gifted property, your basis is generally the same as the donor's basis.

Keep home-purchase documents and receipts for home improvements for three years after you've sold the home. But if you sell the house before then or if your gains are larger, then you'll need to have your home-purchase records to establish your basis.

You can add the cost of significant home improvements to the basis, which will help reduce your tax liability. See IRS Publication for more details. Similar rules apply for any rental properties you own; save records relating to your basis for at least three years after selling the property. Don't forget to check your state's tax record retention recommendations, too. The tax agency in your state might have more time to audit your state tax return than the IRS has to audit your federal return.

For instance, the California Franchise Tax Board has up to four years to audit state income tax returns, so California residents should save related documents for at least that long.