How many years of taxes do you have to keep for a business?

How many years of taxes do you have to keep for a business

As the looming tax season approaches, many taxpayers scramble to find the answers pertinent to their unique employment, investment and business-related questions from qualified accountants. The question of how long to hold on to tax-related paperwork is one of the most frequently-asked questions that preparers and accountants receive each year. While the specific answers vary greatly depending on the type of paperwork in question, the general rule of thumb is to hold on to every tax-related document for 7 years. This general rule of thumb is especially important if you own a business, or if you have a lot of investments or deductions that would flag the IRS and put you at risk for an audit.

Any documents pertinent to business income tax returns or amendments should be kept for 7 years. If you are filing as a sole-proprietor or an LLC, documents such as accounts payable/receivable ledgers, detailed expense reports and invoices should also be kept for 7 years. If canceled checks are pertinent to tax filing, those should also be kept for the maximum of 7 years along with supporting bank account and credit card statements. If you or an employee has suffered an on-the-job injury, those files should be kept for at least 7 years. If workers compensation was involved, it is very important to keep any files for up to 10 years; you can dispose of them 7 years from when the matter was resolved or finalized.

Employment tax records involving pay, pension, and annuity information should be kept on file for 4 years. Business asset receipts such as vehicle titles should be kept until the property is sold. A licensed tax professional can guide you with answers and advice on unique situations you may encounter in your business or as an employee. Always, make sure to use a cross-cut shredder to dispose of important tax and financial documents once you are ready to throw them away.

 

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Deciding which mortgage lender is right for you

Business partnership. House agent greeting customer in office

A mortgage is a credit facility that is used to buy a house. Many people opt to secure a house through a mortgage loan instead of renting. In this type of loan, the house is registered with the lender’s name. The house is fully transferred to the borrower after all the installments are paid. Many types of lenders give mortgage loans. Some of the most common lenders include:

  1. Direct Lenders

A direct mortgage lender is usually a commercial bank. The borrower, in this case, deals directly with the money lending institution. The lender evaluates the borrower’s paying capability before giving the loan. Some of the benefits of obtaining a mortgage from a direct lender include:

  • A direct lender is reliable in most cases. Brokers at times may give the wrong information to increase their commission. However, with a bank, it’s different. The borrower can access all the information concerning the terms of the loan from the lender.
  • A mortgage from a direct lender is also cheaper than with brokers.
  • Direct lenders process the loan faster than when brokers are involved.

The main disadvantage of obtaining a mortgage from a direct lender is that the borrower does not have the chance of comparing what other lenders are offering.

  1. Mortgage brokers

A broker is usually an individual who advises on the different types of mortgages offered by lenders. The broker gives the borrower a list of lenders from which the borrower chooses the most appropriate. The broker then links the borrower with the lender.

Benefits of brokers:

  • They offer the borrower a variety of lenders. The borrower can choose the best lender from the listed ones.
  • The broker also advises the borrower. This helps the borrower to make a right decision when selecting a lender.
  • With a broker, the lender saves time that could have been used in identifying available lenders.

The disadvantage of brokers:

  • At times, brokers may hike the lender’s charges to make more profit from the borrower. This leads to the borrower paying more for the loan.
  1. Real estate companies

Most construction companies these days are also offering mortgage loans.
The borrower can decide from the available option the most appropriate one. It is essential to understand the lender’s terms and conditions.

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How can I get a copy of my W-2 from previous years?

How can I get a copy of my W-2 from previous years

Obtaining a W-2 form from past years is necessary for filing your taxes, especially if you are preparing for an audit or have been informed of possible tax refunds by an accountant. You might be asked to submit proof of your income, in case you didn’t receive a W-2 form beforehand. Did you happen to lose a prior year W-2 form? Then, there’s no need to worry. The process itself isn’t as complicated as you may think. In fact, there are three ways to request an old copy of your W-2 form.

One way to access your W-2 form is to call the payroll department of your former employer, who is responsible for keeping records of tax information. You can ask them to send you the W-2 record. Current employers also have your W-2 input into the system, as indicated by the tax season. Do you know your employer’s payroll provider? Give them a call to inquire about mailing a W-2 to your home. Remember to verify your name, address, W-2 year, and social security number, to help them identify your W-2 on file.

Employers do sometimes forget to send a copy of past W-2 forms since they aren’t very high on the boss’s priority list. Another option is to contact your tax preparer by phone or email. Let them know the year of the W-2 form you want so they can send it to your address. The tax preparer is able to estimate how many weeks it takes for your W-2 to deliver. Don’t wait too long to fill out your prior year tax return.

If all else fails, you’ll have to request a W-2 copy from the IRS based on the type of information you need. Their “Get Transcript” tool allows you to obtain W-2 forms under 10 years old. It is completely free. Use form 4506 to get a W-2 that contains additional information. Try form 4506-T if you want just the records on your W-2 and not the whole thing.

 

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Why does a mortgage company need a transcript of tax return?

Why does a mortgage company need a transcript of tax return

When applying for a mortgage, the potential borrower is asked to submit several pieces of documentation to the lender. Documents that are typically required include recent tax returns, pay stubs, W-2 forms, statements from any bank and investment accounts and information about outstanding debts. A lending institution will also frequently obtain a transcript of the applicant’s recent tax filings. These transcripts may be requested for the previous year or the most recent two years.
Transcripts differ from tax returns in that they contain only the relevant information a lender would need to know, and they are issued by the IRS rather than provided by the applicant. The lender uses these documents to verify the applicant’s income and to reach a decision if the loan will be issued. Tax transcripts are used as a check against the other paperwork submitted by the potential borrower. If any discrepancies exist, the applicant will be asked to provide a reason for the inconsistencies.
The applicant will be required to sign a release form giving the IRS permission to send the document to the lending institution through the United States Postal Service. Since the document is sent to the lender directly, there is no chance for the information to be altered by the applicant.
The IRS requires written consent from the potential borrower before sending any tax information to an outside party. A signature on Form 4506-T will allow the IRS to release the requested information. Form 4506-T may be downloaded at IRS.gov, requested by calling 1-800-908-9946 or an online transcript request can also be submitted via the IRS website.
Due to the increasing concern about fraudulent mortgage applications, lending institutions now make it a common practice to require recent tax transcripts before a loan is issued. Comparing submitted tax returns to tax transcripts obtained directly from the IRS provides an additional layer of protection.

 

 

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How long does an employer have to keep your W-2?

Form W-2 Wage and Tax Statement

Tax season is coming upon us, and many employees are wondering how long their current or previous employers have kept their W-2 forms on file. Record retention varies depending on the documentation that is in question, but there are specific regulations regarding W-2 retention. The Internal Revenue Service (IRS) can actually audit small businesses for up to three years prior to the current tax year. This is why it is imperative to learn employer retention regulations whether you’re an employer or an employee.

If you’re looking for your W-2 forms from a few years back, you’re in luck. The IRS orders business owners to keep these documents on file for up to four years. Many employers choose to keep them longer just in case, but the federal requirement when it comes to Copy D (employer copy) W-2 forms, the general rule is a minimum of four years. If you’re looking to obtain copies of your W-2 forms within this time period, your employer should be able to send them to you within 30 days of your request.

If you never received a W-2 when you were supposed to, your employer should still have a copy of your W-2 for the year in question up to six years prior. Some W-2’s end up coming back as “undeliverable”, and the IRS requires these W-2’s to be kept for a six-year minimum. The six years should start after the initial delivery date. If you changed your address, or the form got lost in the mail, you will still have access to the forms in question as long as it is within that six-year timeframe.

Filing taxes is a hectic process for many, so it is not uncommon for tax forms to be misplaced somehow. Thankfully, no matter how small the company you work for is, they are still required to retain W-2 forms for the four-year timeframe. By contacting your employer and requesting a copy of their Copy D form, you will be all set for any future dealings regarding those specific W-2’s.

 

 

 

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