Also keep records of purchases being depreciated or for
which you claimed the Sec. 179 deduction for at least 3
years after the last deduction for depreciation claimed.
Example: office furniture bought in 2000, depreciation 7
years, keep cost receipt until at least 2010.

Also if your wife is making a profit and paying into Social
Security, she wants the tax returns kept which show her
eligibility for her own Social Security.

Nan, EA in LA

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WeathermanBill <no[at]spam.com> wrote:

- quote -

Within limits, yes. For the 1999 tax year, you need to keep
the supporting records until 4/15/2003.

You should keep the returns themselves for longer, however,
because there is a much longer statute of limitations for
"failure to file". I'd hold onto the returns themselves
(including schedule whatevers) for at least 10 years. Then
if the IRS comes and says "you didn't file for 1999", you
can pull out your copies as evidence that you did. (It's not
proof -- you might have filled out the forms but never filed
-- but it tends to show that you did.) If you sent in tax
payments, keep the cancelled checks. At least the ones for
any payment that accompanied the returns. That would be
even better evidence that you filed -- why pay but not file?

Last time I looked there was _no_ statute of limitations on
tax _fraud_ -- deliberately underreporting your income,
frex. But that's so much harder to prove that you might not
need much. Maybe a monthly or yearly "ledger" summary,
however often you balance your books.

Warning: I'm not an attorney or a tax professional.
If you want legal advice, hire a lawyer.

--
I pledge allegiance to the Constitution of the United States
of America, and to the republic which it established, one
nation from many peoples, promising liberty and justice for
all.

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WeathermanBill wrote:

- quote -

For simple expenses, OK. However, for depreciable property
and other things that have a multi-year effect, that should
be three years from the LAST year it effects. In my state,
the state has a FOUR year period, so watch out for such
differences. Of course, you will be keeping the tax return
itself for longer -in case the IRS thinks you didn't file
one.

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Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote:

snip
- quote -

Thanks to all for the replies.

Bill

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WeathermanBill wrote:

- quote -

Depends on how you look at safe <grin> . Consider this--the
statute only runs if the return was filed. What if the IRS
asserts four years down the line that the return wasn't
filed, you don't have a certified mail receipt or other
acceptable proof of filing under the IRC?

As well, be sure to consider state tax law requirements
(Arizona has a *four* year statute of limitations, one year
longer than the federal) as well as other relevant statutes
of limitation that might be impacted (for instance, should
your wife be involved in a suit that involves her business).

So while your answer is a "textbook" one for federal tax
purposes, I wouldn't necessarily act on it without
considering the other issues I mentioned.

--
Ed Zollars, CPA
Phoenix, Arizona

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"WeathermanBill" <no[at]spam.com> wrote:

- quote -

And if something is wrong the IRS can go back and audit that
area for another 3 - and another 3 ad infinitum. I
recommend that my clients keep their records a min of 7
years and records relating to capital gains basically
forever.

Rgs,

Mark

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- quote -

While it might be "right", I would not advise destroying
them until seven years. Just a personal opinion, however.

OTOH, I keep telling myself that I *can* destroy that stuff
from the business we closed in 1991. <G
Carol

If you awoke to find yourself a success, you weren't asleep.
Semper Gumby (Always Flexible)

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WeathermanBill <no[at]spam.com> writes:

- quote -

In the case of business interests, it might behoove you to
keep the records for a much longer period of time. For
instance, if you are depreciating property, you'd want to
keep the records for three years after the property is fully
depreciated. If you have business property (offices) the
period of depreciation is almost 40 years!!! Hang on to
those returns as long as there could be anything contained
in them which could have bearing on current day claims.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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My wife owns a sole proprietorship. Researching the IRS
site it states that "tax returns and supporting records"
should be kept for the later of:

*3 years after the return is due

Since the 1999 Tax Return was due 4/15/2000 adding three
years would bring me to 4/15/2003 therefore I can safely
destroy these records. Am I interpreting this right.

Bill

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