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Keep a Copy of Your Electronic Tax Return

Friday, March 30, 2012  No comments

E-file is the wave of the future, but make sure you have a back-up.
According to efile.com, 80% of income tax returns were e-filed in 2011. Of those, 35% were filed from home computers. IRS statistics from 2009 show that 67% of returns were e-filed with 34% coming from home computers.

The trend is for more and more of us to file our returns electronically - or paperless. Do you have a copy of your return? Is it on your computer or on the computer of the tax preparer? Can you easily access a copy of that return if you need it? The easy solution is to print a copy of your return and keep it in your files. Another alternative is to have a back-up copy, on another computer, on a flash drive, on the cloud, through an on-line back-up system, but have one somewhere.

Why should you print a copy of your return? What if the software company that you use to do the return disappears? What if your computer (or their computer) dies? What if IRS has a question on your return or says they did not receive it? Not to mention the fact that you should look over the return to be sure it is correct. You should keep your return for at least seven years and then you can toss it - or better yet, shred it or delete it.

Paperless is great, as long as you have a back-up plan.

- By Beverly DeVeny and Jared Trexler

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Thursday's Slott Report Mailbag

Consumers: Send in Your Questions to [email protected]

Q:
I transferred a stock from my IRA to my regular (non IRA account) and then transferred the exact same number of shares of the same stock back into my IRA within 60 days. However, the value of those shares was $10,000 higher.

Do I have a problem because I put more money into the IRA even though I transferred the same number of shares?

Thanks
Mark

A:
There is no problem. Your distribution of property (shares of stock) from your IRA qualifies to be rolled over tax-free within 60 days only if the identical stock is rolled over to a receiving IRA. It is common for the value of stock to change during the 60-day window. That’s OK and still qualifies as a tax-free rollover. When your tax return is filed for the year, your tax preparer may want to attach a note to explain the different values.

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