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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 341
Experience:  Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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Anyone have a good concise list of tax record keeping requirements

Resolved Question:

Anyone have a good concise list of tax record keeping requirements and systems for selling stuff on e-bay?
Submitted: 6 months ago.
Category: Tax
Expert:  taxmanrog replied 6 months ago.

Welcome to Just Answers! Thank you for giving me the opportunity to assist you! I will do my best to help!

 

You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.

 

The length of time you should keep a document depends on the action, expense, or event the document records. You must keep your records as long as they may be needed to prove the income or deductions on a tax return. The IRS does not have any set record keeping requirements. However, as they must be available to prove items of income and deductions, they have to be kept at least as long as the statute of limitations.

 

Since the normal statute of limitations for auditing a return is 3 years, and we file anywhere from 3 to 9 or 10 months in the year FOLLOWING the year of the transaction, four years is the minimum amount of time to keep records.

 

However, if the return omits 25% or more of the gross income, the statute of limitations becomes six years, plus the year of filing, so I usually tell my clients to keep their records MORE THAN 7 years.

 

The MA CPA Society has put together a good pamphlet on record retention. It can be viewed here:

 

http://www.cpa.net/resources/retengde.pdf

 

This pamphlet shows that some items should be kept permanently, while others have a limited retention time. In this day of identity fraud, it is important that the records be properly destroyed when the retention period is over.

 

I hope this has answered your questions! If you have any more, please let me know. If my answer has been helpful to you, please rate me highly! I would appreciate that !

 

Thanks again! Have a great week!

 

Roger

 

taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 341
Experience: Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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