IRS Publication 552

What Is IRS Publication 552?

A document distributed by the Internal Revenue Service (IRS) that gives information on which documents to keep on file and for how long, for tax filing purposes.

The IRS proposes keeping accurate records to distinguish kinds of revenue, keep track of expenses, and have the option to back up the information gave in the tax return. IRS Publication 552 doesn't show the method of record-keeping.

Understanding IRS Publication 552

Keeping accurate records and having those records promptly open makes tax filing simpler, and is essential for setting the fitting cost basis for the sale of investments and property.

Essential records are those documents that everyone ought to keep. As per the IRS, these essential records include:

• W2s
• 1099s
• Tax Returns
• Bank statements
• Brokerage statements
• Paystubs
• Sales slips, receipts, or solicitations for major buys
• Canceled checks or proof of payment for major buys
• Insurance strategies
• Closing statements of real estate exchanges
• Deeds
• Titles (for example to cars or boats)
• Imperative records (for example birth certificates, marriage certificates, and so forth.)

IRS Publication 552 layouts the type of records that individual taxpayers ought to keep, not businesses. Allude to IRS Publication 583 for business record keeping.

Why Keep Good Records

The IRS features several motivations to embrace a decent recordkeeping strategy in Publication 552, and not just for tax purposes. Different points include:

• Better budgeting of income and expenses
• Keeping track of cost basis on property, legacies, or investments
• Applying for loans
• Applying for insurance

Records can be kept either in physical form (e.g., a checkbook or ledger) or as an electronic record utilizing accounting or bookkeeping software.

How Long to Keep Records

The accompanying information is straightforwardly from IRS.gov, which states how long to keep income tax returns. The years determined start after the return was filed. Any returns filed before the due date are considered to have been filed on the due date.

1. Keep records for three years if circumstances (4), (5), and (6) below don't concern you.
2. Keep records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, in the event that you file a claim for credit or refund after you file your return.
3. Keep records for seven years on the off chance that you file a claim for a loss from worthless securities or terrible debt deduction.
4. Keep records for six years on the off chance that you don't report income that you ought to report, and it is over 25% of the gross income displayed on your return.
5. Keep records indefinitely on the off chance that you don't file a return.
6. Keep records indefinitely on the off chance that you file a fraudulent return.
7. Keep employment tax records for somewhere around four years after the date that the tax becomes due or is paid, whichever is later

Features

• This publication is expected for individual taxpayers and doesn't examine the records you ought to keep while operating a business.
• Great recordkeeping rehearses are important for taxes, however for some parts of personal finances from acquiring loans, purchasing property, and getting life insurance, among others.
• IRS Publication 552, entitled Recordkeeping for Individuals, covers the reason why you ought to keep records, what sorts of records you ought to keep, and how long you ought to keep them for tax purposes.