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How Long To Keep Tax Records: When Can You Throw Them Away?

Once you have submitted your tax return to the Internal Revenue Service each year, you may be thinking of when the next bonfire will be so that you can toss all that paperwork into it. But making arrangements for safely storing your tax paperwork is essential to protect yourself in the event of a future IRS audit.

The general rule is to keep your tax records for three years from the date you filed your return, but there are several important exceptions for when you might need to keep your tax records for a longer period as a taxpayer. Read on to learn how long to keep your tax records and when you can safely dispose of them.

Determining Expiration of the Statute of Limitations

Typically, the statute of limitations for the IRS to audit your income tax return is generally three years.  The statute of limitations [Read More]

July 18th, 2021|Articles|

IRS Audit Campaign Targets Nonresident Alien U.S. Real Estate Activities

 

On September 14, 2020 and October 5, 2020 the IRS announced the launch of two campaigns that would target the real estate investment activities of non US persons in the United States. The October 5, 2020  campaign focuses on NRAs receiving rental income from U.S. property and the requirement to comply with the Internal Revenue Code’s reporting and filing requirements. The IRS September NRA U.S. real estate campaign targeted compliance with the withholding and reporting obligations of the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA).

Why These Two Campaigns?

The purchase of U.S. real estate by foreign nationals is a major source of investment in the United States. Property sales to foreign buyers in 2019 totaled [Read More]

November 3rd, 2020|Articles|

New Form 1099-NEC

(Non-employee Compensation)

The 1099-NEC is used strictly for reporting independent contractor payments of $600 or more in the course of your trade or business. You will still be required to use the 1099-MISC for such items as royalties, rent, and healthcare payments.

If you’re accustomed to filing Form 1099-MISC to report nonemployee compensation, the IRS has made things more difficult as usualThe government is now bringing back Form 1099-NEC for that purpose, a form that was last used in 1982.

The 1099-NEC is being reintroduced to address confusion created by the PATH (Protecting Americans from Tax Hikes) Act of 2015. That Act established different due dates for the various types of income reported on the 1099-MISC, leading to undeserved penalty notices for filers. The renewed 1099-NEC form separates out [Read More]

October 1st, 2020|Articles|