Posted on

March 2024 Question and Answer

QUESTION:

I’m big into spring cleaning this year and wondering whether I can toss my old tax returns and records.

ANSWER:

Generally, keep tax returns for at least three years from the return’s due date. The IRS can go back up to six years if your return omitted more than 25% of income. There’s no limit if fraud is proven. Also, businesses should hang on to payroll tax records for a minimum of four years after the due date for filing Form 941 for the fourth quarter of a year. Additionally, records on costs of business assets, depreciation, etc., should be retained for decades. It’s best to follow the advice of your tax professional.

Posted on

February 2022 Questions and Answers

Question:

After I file my taxes this year, how long do I need to keep my tax records?

Answer:

The general rule is to keep your records for three years from the date you filed your original return. But there are exceptions. For example, if you claim a loss from worthless securities or bad debt, keep your information for seven years. And your state may have different expectations for retaining tax documents. Keep in mind you may need to keep some documents longer for non-tax purposes. For example, you may want to keep records related to purchasing your home, car or other insured assets for insurance purposes or to prove your basis in an asset.

Question:

What’s involved if I want to franchise my business?

Answer:

Franchising your business can be expensive and time-consuming, so be sure you’ve done your homework to ensure you have a unique product with a proven track record of sales. Then you’ll want to engage with an experienced attorney to help you create your franchise agreement and disclosures. Consider working with a franchise consultant to help develop operations manuals and marketing materials. And spend time choosing the new locations, whether that’s staying in your home state, taking it national, or expanding into international markets.