For US taxpayers, May 17 (Tax Day) is fast approaching, and the question is often asked – How long should I keep my tax records?
Here is a brief rundown of required or suggested recordkeeping periods for income tax records in the United States and other jurisdictions around the globe. These time periods do not account for business needs, industry practice, or other legal requirements or exceptions applying to various tax-related records that could potentially increase the required time to keep such records.
As we have previously discussed, the general IRS-suggested records retention period for US citizens starts at three years, and fluctuates to up to seven years (and in some cases, indefinitely), depending on various circumstances and limitation periods.
Keep supporting tax documents for six years after the end of the tax year to which they relate.
Keep tax and accounting records five years from the date taxes were filed or due.
Individuals (not carrying on a business): keep records for 22 months from the end of the tax year to which the records relate.
Self-employed or in a partnership: keep records for at least five years from 31 January following the tax year to which the return relates.
Companies: typically, accounting records must be kept for six years from the end of the accounting period.
Individuals (Under the Income Tax Act): generally need to keep tax records for seven years, but some documents may be stored for five years. Companies also will need to store tax and accounting records for seven years, but the Companies Act requires records to be kept for ten years, regardless of tax law requirements.
Tax records are to be kept for a general period of five years, which mirrors the standard tax limitation period.
Generally, taxpayers need to keep accounting and tax-related records for six years (trade or business letters sent or received, other relevant tax-related documents) or ten years (accounting records, inventories, annual financial statements, opening balance sheets, etc.).
Source: Fiscal Code of Germany
Accounting and tax-related records for people in a variety of professions are to be kept for six years from the end of the relevant assessment year.
Source: Income Tax Rules, Rule 6F
Tax records must be kept for six years, with records of certain transactions to be kept for ten years.
Accounting and tax records need to be kept for ten years, except as otherwise stipulated in other laws or regulations.
It is wise to carefully consider the tax laws, regulations, and recordkeeping requirements in your jurisdiction to make sure you remain legally compliant and prepared for audits or other circumstances requiring access to these records. Proper recordkeeping along with a well-crafted records retention plan helps to avoid possible legal, compliance, or other issues down the road.
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Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.