How long do I need to keep documentation for tax forms? Is it current year plus three, for a total of four years?


Q. (cont.) What about online? I use a 1099Pro software, which I use to print the forms and upload to the IRS.  I have the recipient information going back to 2010, when I started using 1099Pro.  Should I keep all those files on my computer from 2010?  I’m getting a new computer and IT says they will have to install all those years again. 

A. According to the 2016 IRS General Instructions for Certain Information Returns, “Generally, keep copies of information returns you files with the IRS or have the ability to reconstruct the data for at least 3 years, 4 years for Form 1099-C, from the due date of the returns. Keep copies of information returns for 4 years if backup withholding was imposed.” No distinction is made between paper copies and electronic.

But the tax experts at Cokala point out that you are required to keep supporting documentation along with the 1099 forms for as long as an IRS filing made in reliance on those forms is still open to audit. So a more conservative approach would be seven years, a common recommendation for the retention period of most transaction records. Check with your company's tax department or tax attorney.

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