Generally, the IRS can include returns filed within the last three years in an audit. If they identify a substantial error, they may add additional years but usually don’t go back more than the last six years.

Therefore, the general rule for retaining documents is 3 years from the date you file, for most of your expenses. For equipment and auto expenses the rule is 5 years. For any assets that are long term, such as capital assets, investments, or real estate, you should retain your original purchase documents until you sell or dispose of those assets, plus 3 years.

Copies of your actual returns and W2s should be kept forever, or until after you retire and are satisfied that your social security and retirement plans have been appropriately calculated. (And then still follow the "3 years from the date you file" rule.)

Insofar as credit card statements are not accepted as proof of expenditures, we always recommend that ALL receipts, including the actual credit card receipts, be retained for the audit period. And save your calendar/appointment log.

For additional information see: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

If you are determined to clear out your paper files, we recommend you consider storing secure digital copies of pertinent documents.

Click https://my.ny.gov/LoginV4/login.xhtml and sign in.

For detailed instructions on how to access your 1099-G within your account, click here.

In short, select the "Unemployment Services" button, and from there, under the “Get your NYS 1099-G” section, select the year you want in the NYS 1099-G drop-down menu. Then select the “Get Your NYS 1099-G” button.

If you get a file titled “null” after you click the 1099-G button, click on that file. A box may pop up asking you to choose a program. If it does, select “Adobe Reader," and then select “OK.” Your form 1099-G will appear in the Adobe Reader window. You can save it to your device and print it for your records.

You are within your rights to request a penalty waiver at any time. There are two instances where an IRS penalty waiver may be granted:

1. If it is the first time you've had penalties charged. (This waiver is called a first-time abatement).

2. Or if there is a “reasonable cause” -- some important or life-altering experience -- that kept you from day-to-day tax compliance matters (i.e. death of a close family member, you were chronically ill or caring for an ill family member, etc.)

The first-time penalty abatement (FTA) waiver is an administrative waiver that the IRS may grant to relieve taxpayers from failure-to-file, failure-to-pay and failure-to-deposit penalties if certain criteria are met. The policy behind this procedure is to reward taxpayers for having a clean compliance history; everyone is entitled to one mistake.

To qualify for the FTA waiver, a taxpayer must meet the following criteria:

• Filing compliance: Must have filed (or filed a valid extension for) all required returns and can’t have an outstanding request for a return from the IRS.

• Payment compliance: Must have paid or arranged to pay all tax due (can be in an installment agreement if the payments are current).

• Clean penalty history: Has no prior penalties (except a possible estimated tax penalty) for the preceding three years.

The IRS recommends doing a "paycheck checkup" during the tax year. This can be especially helpful if you have experienced any of the following changes:

• Lifestyle changes such as marriage, divorce, birth of a child or retirement

• Change in wages because you or your spouse started or stopped working

• Taxable income not subject to withholding such as self-employment income, IRA distributions or capital gains

• Tax credits such as the child tax credit, earned income credit (EIC), dependent care credit or an education credit

To check your federal withholding, click here to use the IRS Withholding Estimator.

To properly report the taxable gains from the sale of your home, you will need the following documents:

• The closing statement from the sale

• The closing statement from the original purchase

• Documents showing the cost of any capital improvements you made while you owned the home

• 1099-S if one is issued at sale

The IRS allows you to exclude $250,000 of your gains from taxation ($500,000 if married filing jointly), if you meet both of the following criteria:

• owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing)

• used it as your primary residence for at least 24 months of the previous 5 years

There is a possibility that you might be able to claim a partial exclusion if you sell before satisfying the two-year requirements. To qualify for partial exclusion, the main reason for your home sale would need to be for one of the following reasons:

• a change in workplace location,

• a health issue,

• or an unforeseeable event.

Additional rules apply to each of these scenarios.

If you would like to schedule a consultation with us to discuss this further, please click here to make an appointment.

Unfortunately, cyber crimes and identity theft are on the rise. As a prevention measure against tax identity theft, the IRS is encouraging taxpayers to get an Identity Protection PIN to use when filing their taxes. Click here for more information.

The following are signs of tax identity theft:

• You receive a letter from the IRS inquiring about a suspicious tax return that you did not file.
• The e-file of your tax return is rejected because of a duplicate Social Security number.
• You receive a tax transcript in the mail that you did not request.
• You receive an IRS notice that an online account has been created in your name.
• You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
• You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
• IRS records indicate you received wages or other income from an employer you didn’t work for.
• You’ve been assigned an Employer Identification Number but you did not request an EIN.

IRS representative only discuss personal information with the taxpayer or someone the taxpayer authorizes to speak on their behalf. To ensure they don’t have to call back, taxpayers, should have the following information ready:

• Social Security numbers and birth dates for those who were included on the tax return
• An Individual Taxpayer Identification Number letter if the taxpayer has an ITIN instead of an SSN
• Their filing status: single, head of household, married filing jointly, married filing separate, or qualifying widow or widower with a dependent child (this can be found at the top of the first page on your Federal tax return - Form 1040)
• The prior-year tax return. Phone representatives may need to verify taxpayer identity with information from the return before answering certain questions
• A copy of the tax return in question
• IRS letters or notices received by the taxpayer

The IRS will never:

• Call to demand immediate payment using a specific payment method such as a gift card, prepaid debit card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Demand that taxpayers pay taxes without the opportunity to question or appeal the amount they owe. All taxpayers should be aware of their rights.
• Threaten to bring in local police, immigration officers or other law enforcement to have the taxpayer arrested for not paying.
• Threaten to revoke the taxpayer's driver's license, business licenses or immigration status.