Keeping Those Old Tax Forms

Sometimes the simple things we do — or don’t do — today, can have repercussions decades from now. In the case of what to do with your old tax returns, the best thing you can do is nothing. Keep them. Forever. Instead of trashing those old 1040s after the six years the IRS recommends, just let them gather dust in a box in your garage. You may need to access those records many years from now. You may have heard the recent case of a man who was told by the Social Security Administration that he didn’t have enough time of service to qualify for retirement benefits. It was a clerical error on the administration’s part. The man had been working since he was in his teens, clearly qualified for benefits, yet didn’t have the documentation to defend his claim to Social Security — simply because he tossed his tax returns after 10 years. Unable to resolve the situation, this individual ended up delaying retirement, and working two more years before becoming eligible for his monthly checks. You may need old tax returns to document expenses if you’re audited, to avoid collections if the IRS claims you may owe them money, or to document retirement plan contributions. And you never know WHEN you may need them, so leave them alone, and keep them forever. And of course, always make sure tax records are securely stored.