With many financial institutions around the country holding Free Shred Days around the country as part of Money Smart Week 4/20 - 4/27
, a cautionary note.
According to the IRS, individual taxpayers should keep returns for three to six years. Non-filers and fraudsters should keep their records forever. (See the IRS guidelines on record retention.) Read more
The IRS is wrong about this.
Let’s look at the case of David, a teacher. He is a responsible and ethical person who always files his tax returns on time — and correctly. He should be in that three-to-six-year category. Or so he thought.
Recently, David decided to clean out his old files and shred all his un-needed records. He kept the last decade’s worth. No problem, right?
Right. Until he pulled his Social Security record to look up his retirement benefits. He found they didn’t show enough quarters of work. David was short two years. The Social Security Administration (SSA) was missing data from years when he had a job outside the school district.
If you haven't done so before, it's one more reason to check your Social Security Administration records - and the earlier the better.