The passing of a loved one is a difficult time, and dealing with their estate can be overwhelming. One of the many questions you may have is how long you should keep their records for the Internal Revenue Service (IRS).
General Rule: Keep Records for 3 Years
According to the IRS, taxpayers should generally keep their tax returns and related documentation for at least three years from the date of filing their taxes. This is because the IRS has a three-year statute of limitations to audit a tax return. This means that the IRS can generally only audit a return for the three years following the filing date.
Exceptions to the 3-Year Rule
There are a few exceptions to the three-year statute of limitations. The IRS can audit a return for up to six years if the taxpayer underreports their income by 25% or more. The IRS can also audit a return indefinitely if the taxpayer fraudulently files a return or fails to file a return.
What Records to Keep
In addition to tax returns, you should also keep other important tax-related documents, such as:
- Form W-2s
- Form 1099s
- Form 1098s
- Receipts from charitable giving
- Health and college savings plans
- Retirement savings plans
- Property tax bills
- Property documents
- Estate documents
- Asset records
How to Store Records
You should store tax records in a safe and secure place, such as a fireproof safe or a secure digital storage service. You should also make copies of important records and store them in a separate location.
When to Shred Records
Once you have kept records for the required amount of time, you can shred them. However, you should be careful not to shred records that may be needed for other purposes, such as estate planning or probate.
Keeping deceased person’s records for the IRS can be a daunting task, but it is important to do so to avoid any potential problems with the IRS. By following the guidelines in this article, you can ensure that you are keeping the necessary records for the appropriate amount of time.
Additional Tips
- If you are unsure whether or not you should keep a particular record, it is always better to err on the side of caution and keep it.
- You can get help from a tax professional or an estate planning attorney to determine which records you need to keep and for how long.
- Keep records organized and easily accessible in case you need to refer to them in the future.
- Consider using a digital storage service to securely store and organize your records.
By following these tips, you can make sure that you are properly managing deceased person’s records for the IRS.
Deceased Person Tax Return
FAQ
How long should you keep a deceased person’s tax returns?
How long should you keep financial records for a deceased person?
How many years does the IRS require you to keep records?
How long does the IRS have to collect after death?
How long should you keep a deceased person’s tax records?
Sometimes, by the time IRS agents get around to auditing a return, the person who filed the return may already be deceased. Generally, it is a good idea to keep a deceased loved one’s or business partner’s tax records for seven years. How Long Should I Keep a Deceased Person’s Tax Records? Can a Deceased Person Be Audited?
How long should a tax return be kept after a death?
In some specific instances it can be longer. Financial experts suggest that records be held for an additional two to three years in case there are questions about the deceased’s final return. Keep proof of income and expenses for the same time you keep the tax return. For income, this includes W-2s, 1099s, bank or brokerage statements and K-1s.
How long should a decedent keep a tax return?
In case issues arise from the decedent’s returns filed before death, keep federal and state income tax returns and statements for at least three years. In case you may have overlooked income or were unsure of all the sources of income the decedent had received, hold onto the records for at least six years to be on the safe side.
How long should you keep employment tax records?
Keep records indefinitely if you file a fraudulent return. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later. The following questions should be applied to each record as you decide whether to keep a document or throw it away.