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Tax records: What can you toss and what should you keep?
Generally, the IRS has three years to audit a tax return, from the later of the due date of the return, or the date you file. You can also file an amended return within this time frame if you overlooked something. Here’s what you need to know about keeping financial records involved in your tax returns.
Federal tax records
Despite the three-year guideline, many tax advisors recommend retaining copies of your finished tax returns indefinitely to prove that you filed. Even if you don’t keep returns indefinitely, at least keep them for six years after the returns are due or filed, whichever…
New Questions about BOI Reporting
A recent federal court ruling has raised questions about a controversial new rule requiring millions of small- to medium-sized business owners to report detailed personal information to the U.S. Treasury Department. This new rule—the Beneficial Ownership Information (BOI) Reporting Rule—went into effect on Jan. 1, 2024, but on March 1, a U.S. District Court judge found that the law establishing the rule is unconstitutional and prohibited the department’s Financial Crimes Enforcement Network (FinCEN) from enforcing it.
The judge’s ruling applies to only a few of the estimated 33 million businesses subject to the BOI requirement, and the Justice…
Is your business closing? Be sure to handle any and all final tax responsibilities
Businesses shut down for many reasons. Here are just a few:
- An owner’s retirement,
- A lease expiration,
- Staffing shortages,
- Partner conflicts, and
- Increased supply costs.
If you’ve decided to close your business, you might need assistance with some steps in the process, including handling various tax obligations. For example, a final income tax return and related forms must be filed for the year of closing. The correct return to file depends on the type of business. Here’s a rundown of the requirements.
Sole proprietorships. You must file the usual Schedule C, “Profit or Loss from Business,” with your…