Good records can save you money and stress if the IRS ever has questions. But how long do you really need to keep them?

General guidelines

• Most tax records: at least three years after you file
• If you underreported income by more than 25%: six years
• If you claim a loss from worthless securities or bad debt: seven years
• Employment tax records: at least four years
• If you did not file or filed a fraudulent return: keep records indefinitely

Property records

Keep records for a home, rental or business asset until the time limit expires for the year you sell or dispose of it. These can show your cost and improvements, which affect your gain.

Other reasons to keep records

Lenders, insurance companies, states and business partners may have their own requirements. Many people also choose to keep copies of their filed tax returns permanently.

Going digital

Scanned records can be convenient. Store them securely, back them up and make sure that they are legible.

Before you shred

When in doubt, ask your CPA before you throw anything away. Protect your Social Security number and other sensitive information by shredding old documents.

Have questions about your situation? Tax rules change and every situation is different, so please talk with a professional before acting on general information. Call Fajardo & Associates at 407-720-7220 to make an appointment.