Whether you use old-fashioned manila filing folders, a flash drive or cloud storage, tax and personal finance authorities agree on the importance of saving tax documents and records. In addition to using the information for preparing your next income tax return, it may come in handy years from now.
"Your tax data is helpful and often required in many non-tax financial situations," says TaxAct spokesperson Jessi Dolmage. "For instance, insurance companies, lenders and creditors often use tax information to verify income and asset value. Form W-2s can provide proof of income if your Social Security benefits are less than what they should be."
Information to save for your next tax return
Organizing and saving information throughout the year will cut tax return preparation time and can even save you money. Save any information related to:
While you don't need a fancy or high-tech organizing system, you do need to keep the information in a secure place. Consider saving electronic copies to the cloud or on a backup storage device in addition to, or in place of, your paper files.
"One of the key advantages of going digital is that your tax information is better protected from natural disasters," says Dolmage. "Saving electronically also means you can access the information anywhere from a mobile device."
Apps and websites make digitizing documents easy. TaxAct DocVault is a free mobile app and website specifically designed to create and save secure, digital copies of tax documents. At tax time, import DocVault images into TaxAct to save with your return.
What to keep after filing your taxes and how long
Knowing what information to save and for how long can be confusing. As a general rule of thumb, keep tax returns and related documents for at least three years from the April 15 filing deadline.
Certain documents should be saved longer. "Information related to your home, property, investments and retirement plans should be kept indefinitely," says Dolmage. "If you dispose of an asset, be sure to keep the information for another three years."
Business owners should keep tax information for at least four years. That includes employment records, gross receipts, invoices, bank statements, proofs of purchase, asset records, databases, emails and even voicemails.
Refer to IRS Publication 552 at www.irs.gov for more information about tax recordkeeping, Publications 583 and 463 provide specific information for businesses. Visit www.TaxAct.com/apps to download TaxAct DocVault for free.
March 1 — Farmers & fishermen
File your 2017 income tax return (Form 1040) and pay any tax due Details
March 10 — Employees who work for tips
If you received $20 or more in tips during February, report them to your employer Details
March 15 — S Corporations
File a 2017 calendar year income tax return (Form 1120S) and pay any tax due Details
March 15 — S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2017. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2018.
March 15 — Partnerships
File a 2017 calendar year return (Form 1065) Details
March 15 — Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004
March 15 — Partnerships
Electing large partnerships: File a 2017 calendar year return (Form 1065-B) Details
March 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 applies, deposit the tax for payments in February.
March 31 — Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2017. This due date applies only if you electronically file.
March 31 — Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2017. This due date applies only if you electronically file.
March 31 — Electronic filing of Forms 8027
File Forms 8027 for 2017. This due date applies only if you electronically file.