Terri L. Petring, CPA How is Your Health? Your financial health, that is... As a health care professional, you spend much of your day listening to your patients. It's important to give them your undivided attention in order to offer the right diagnosis. Your patients depend on your knowledge and experience, and trust your opinion to keep their health in tip-top shape. But when it comes to your financial health-who do you turn to? True to her philosophy, Terri Petring offers custom-tailored financial strategies and accounting for health care professionals. And most importantly, she works to sustain the client-advisor relationship over time, so that one advisor and one client may share a prime level of communication and understanding.

Please Enjoy this Month's Featured Article Retaining Tax Information and Records Retaining and storing your income tax information and records is an important final step of your tax filing responsibility. This article contains information on the rules for keeping your tax records. When determining how long to keep most of your income tax information and records, look at (a) the time frame over which the IRS can audit a return and assess a tax deficiency or (b) the time frame during which you can file an amended return. For most taxpayers, this period is three years from the original due date of the return, or the date the return is filed, if later. For example, if you filed your 2008 Form 1040 on or before April 15, 2009, the IRS has until April 15, 2012, to audit the return and assess a deficiency. However, if a return includes a substantial understatement of income, which is defined as omitting income exceeding 25% of the gross amount reported on the return, the statute of limitations period is extended to six years. A good rule of thumb for keeping tax records is to add a year to the IRS statute of limitations period. Using this approach, you should keep your income tax records for a minimum of four years, but it may be more prudent to retain them for seven years, which is what the IRS informally recommends. State tax rules must also be considered, but holding records long enough for IRS purposes will normally suffice for state tax purposes, assuming the federal and state returns were filed at the same time. Certain tax records, however, should be kept much longer than described above and some, indefinitely. Records substantiating the cost basis of property that could eventually be sold, such as investment property and business fixed assets, should be retained based on the record retention period for the year in which the property is sold. Tax returns, IRS and state audit reports, business ledgers, and financial statements are examples of the types of records you normally should retain indefinitely. Keep in mind that there may be nontax reasons to keep certain tax records beyond the time needed for tax purposes. This might include documents such as insurance policies, leases, real estate closing statements, employment records, and other legal documents. Your attorney can provide additional guidance. We hope this brief overview helps you under-stand the income tax record retention rules. If you have any questions regarding your specific situation or if you would like to discuss these rules in more detail, please give us a call. Terri L. Petring, CPA - Santa Ana, CA (714) 558-2135 - terri@terripetring.com   Who We Are Terri L. Petring, CPA has been providing best of class accounting services for over twenty years. Read More >> What We Do We provide quality tax and business services tailored to the health care industry. Read More >> Client Tools We provide you access to your tax returns whenever you need them.  Read More >>