Now that taxpayers have filed their tax returns, here are three questions accountants frequently get asked, along with answers to those questions.
I’m running out of storage. When can I dispose of my old tax files?
Here is the general rule: You should keep tax records as long as they can be audited by the IRS as provided by the statute of limitations, which is generally three years after you file your return. This typically means you can dispose of most of your tax records (but perhaps not all; see below) from 2018 and prior. But if you filed an extension for 2018, you need to hold onto your tax records until at least three years from the date you filed the extended return.
However, if your gross income was understated by more than 25%, the statute of limitations increases to six years. Finally, there is no statute of limitations if you did not file a return or if you filed a fraudulent return. Certain tax-related records should be retained longer.
For example:
- Tax returns should be retained indefinitely, to prove how and what you filed.
- W-2 Forms should be retained until you receive Social Security, to prove your work record and earnings by year.
- Records relating to real estate and investments should be maintained for at least three years after you report their sale on your return, to prove purchase price, cost of additions and improvements, depreciation, etc.
- Retirement account records should be maintained until three years after the account is depleted and the last withdrawal was reported on your return.
My return was filed weeks ago but I have not received the refund. How do I check the status of my refund?
The IRS has an online tool that tells you the status of your refund. Go to www.IRS.gov and click on Get Your Refund Status. You’ll need to enter your Social Security number, filing status and the exact amount of the refund you’re expecting.
After my return was filed, I found some additional tax deductions. What can I do now?
You can file an amended return and claim a refund. Generally, the amended return must be filed within three years of the date you filed the original return or your refund claim will be denied.
