Why It Might Be Good Practice To Keep Your Tax Returns

Many people ask how long they should keeptheir tax returns. Some believe keeping your returns for 3-6 years isenough time. However, there are many reasons why you should at least keep anelectronic copy of all of your tax returns. Below are some reasons why keepingyour tax returns is a good idea. 

1. Your tax returns can be used as proof andprotect your Retirement and Social Security benefits.
2. Protect yourself from audits.
3. Keeping better records will prevent anysurprises regarding taxes owed or refunds due.
4. Sometimes insurance policies switchcompanies and the payout of a policy can be an issue. If you need to prove thepayout amount, you can do that with a tax return.
5. Keeping your tax returns can greatlybenefit your IRA and retirement plan contributions. Your state deduction may meanpart of your contribution will not be taxable. Additionally, if you madenon-deductible contributions for federal purposes it might mean the IRS may nottax part of your contribution.

See EvaRosenberg, Never Throw Away Your Tax Returns Why You May Need ThoseOld 1040’s Someday, MarketWatch.com, Apr. 22, 2013. 

Special thanks to David S. Luber (Attorneyat law, Florida Probate Attorney Wills and Estates Law Firm) 
for bringingthis article to my attention.