How long should I keep my tax documents, and why?
How long you need to keep tax records will depend on jurisdiction. In general, if you discard records in a period of time less than your tax authority recommends, it may create audit problems down the road. ie: if you make a deduction supported by business expense receipts, and you discard those receipts next year, then you won't be able to defend the deduction if your tax authority audits you in 3 years. Generally, how long you keep records would depend on: (a) how much time your tax authority has to audit you; and (b) how long after you file your return you are allowed to make your own amendments. In your case (US-based), the IRS has straight-forward documentation about how long it expects you to keep records: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records Period of Limitations that apply to income tax returns Keep records for 3 years if situations (4), (5), and (6) below do not apply to you. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return. Keep records indefinitely if you do not file a return. Keep records indefinitely if you file a fraudulent return. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later. Note that the above are the minimum periods to keep records; for your own purposes you may want to keep them for longer periods than that. For example, you may be in a position to discover that you would like to refile a prior tax return, because you forgot to claim a tax credit that was available to you. If you would have been eligible to refile in that period but no longer have documentation, you are out of luck. Unfortunately, my taxes tend to be complicated This. In and of itself, is a greater reason to keep the documents. The other answer offered a good summary, but keep in mind, if the IRS decides you fraudulently withheld claiming income, they can go back 7 years.  I bought a rental property in 1987, and sold it in 2016. In that case, keeping the returns seemed the right thing to do to have the paper trail for basis, else I could claim anything, and hope for the best.  I have all my tax returns since my first tax return, 1980. It's one drawer of a file cabinet. Not too great a burden.
My basic rule of thumb is that if the the bill come from a government office of taxation, and that if you fail to pay the amount they can put a tax lien on the property it is a tax. for you the complication is in Pub530: Assessments for local benefits.    You cannot deduct amounts you pay for local benefits that tend to increase the value of your property.   Local benefits include the construction of streets, sidewalks, or   water and sewer systems. You must add these amounts to the basis of   your property.  You can, however, deduct assessments (or taxes) for   local benefits if they are for maintenance, repair, or interest   charges related to those benefits. An example is a charge to repair an   existing sidewalk and any interest included in that charge.  If only a   part of the assessment is for maintenance, repair, or interest   charges, you must be able to show the amount of that part to claim the   deduction. If you cannot show what part of the assessment is for   maintenance, repair, or interest charges, you cannot deduct any of it. An assessment for a local benefit may be listed as an item in your   real estate tax bill. If so, use the rules in this section to find how   much of it, if any, you can deduct. I have never seen a tax bill that said this amount is for new streets, and the rest i for things the IRS says you can deduct. The issue is that if the Center City tax bill is a separate line or a separate bill then does it count. I would go back to the first line of the quote from Pub 530: You cannot deduct amounts you pay for local benefits that tend to   increase the value of your property. Then I would look at the quote from the CCD web site: The Center City District (CCD) is a business improvement district. Our   mission is to keep Philadelphia's downtown, called Center City, clean,   safe, beautiful and fun. We provide security, cleaning and promotional   services that supplement, but do not replace, basic services provided   by the City of Philadelphia and the fundamental responsibilities of   property owners. CCD also makes physical improvements to the downtown, installing and maintaining lighting, > signs, banners, trees and landscape elements.  and later on the same page: CCD directly bills and collects mandatory payments from properties in   the district. CCD also receives voluntary contributions from the   owners of tax-exempt properties that benefit from our services. The issues is that it is a business improvement district (BID), and you aren't a business: I did find this document from the city of Philadelphia explain how to establish a BID: If the nature of the BID is such that organizers wish to include   residential properties within the district and make these properties   subject to the assessment, it may make sense to assess these   properties at a lower level than a commercial property, both because   BID services and benefits are business-focused, and because   owner-occupants often cannot treat NID assessments as tax-deductible   business expenses, like commercial owners do. Care must be taken to   ensure that the difference in commercial and residential assessment   rates is equitable, and complies with the requirements of the CEIA. from the same document: Funds for BID programs and services are generated from a special   assessment paid by the benefited property owners directly to the   organization that manages the BID’s activities. (Note: many leases   have a clause that allows property owners to pass the BID assessment   on to their tenants.) Because they are authorized by the City of   Philadelphia, the assessment levied by the BID becomes a legal   obligation of the property owner and failure to pay can result in the   filing of a lien. I have seen discussion that some BIDS can accept tax deductible donations. This means if a person itemizes they can deduct the donation. I would then feel comfortable deducting the tax because: If you can't deduct it that would mean the only people who can't deduct it are home owners.  So deduct it. (keep in mind I am not a tax professional) $23,000 Student Loans at 4% This represents guaranteed loss. Paying this off quickly is a conservative move, while your other investments may easily surpass 4% return, they are not guaranteed.  Should I just keep my money in my savings account since I want to keep   my money available? Or are there other options I have that are not   necessarily long term may provide better returns? This all depends on your plans, if you're just trying to keep cash in anticipation of the next big dip, you might strike gold, but you could just as easily miss out on significant market gains while waiting. People have a poor track record of predicting market down-turns. If you are concerned about how exposed to market risk you are in your current positions, then you may be more comfortable with a larger cash position. Savings/CDs are low-interest, but much lower risk. If you currently have no savings (you titled the section savings, but they all look like retirement/investment accounts), then I would recommend focusing on that first, getting a healthy emergency fund saved up, and budgeting for your car/house purchases.  There's no way to know if you'd be better off investing everything or piling up cash in the short-term. You have to decide how much risk you are comfortable with and act accordingly. "SO has observed a lot of irresponsible spending from a parent, which has scarred SO for life OK, so we've got fear... SO is not very financially savvy and has very little idea about how much we earn  ...and ignorance.   You are entirely correct to worry about the conversation. Fear plus ignorance equals disastrous conversations. I manage our finances. Apparently your SO wishes to have input on the management of your finances without understanding them. It strikes me that this serves neither of you well. I would note that it is exceedingly difficult to rationally argue someone out of a position that they arrived at through irrational fear and ignorance. So I wouldn't start by having a conversation about charitable giving at all. Rather, I would start by addressing the ignorance, because that's the easy one.  how high up we are in terms of being in the top y% of households by income Income is irrelevant to the fearful; income can vanish with debts remaining. If your SO is not earning much of that income then SO's future financial security is dependent on the whims of another, which has already turned out badly once for SO.  Focusing on raw income is the wrong way to go; focusing on an abstraction like percentile is even more irrelevant. The figures to focus on are not income and percentile, but rather net worth and change in net worth over time.  Income $300K, expenses $350K eventually leads to poverty if you lack net worth, even if you are in the 1% of income earners. Open up with ""how much do you think we earn?"" Playing rhetorical games with ignorant people seems both risky and perhaps unethical to me, and it seems unlikely to engender trust. I would approach this situation by first removing the ignorance, rather than attempting to take advantage of it for rhetorical purposes.  I would also institute a policy that ignorant people don't get a say. If SO wants to abrogate financial responsibility to you, then SO should accept your decisions without question. If SO wants to have a say in your joint financial life then SO has a responsibility to make recommendations based on both facts and feelings, not just feelings. So, how to remove this ignorance? This will take some doing, but not much. Go through your records and account for: From that you can compute your net worth. Then go back a few years and account for: From this you can show the effect of your past prudent decisions on your net worth. There should be no percentages. There should be no math more complicated than adding and subtracting, and it should be very clear what adds and substracts to what.  People who are financially savvy are extremely intimidated by jargon. If some of your increase in net worth came from a realized capital gain less taxes do not say ""realized capital gain less taxes"" on your summary document. There should be no ""depreciation"" or ""cost basis"" or anything even vaguely like that. Even ""assets"" and ""liabilities"" are too jargonish. ""Possessions"" and ""debts"" are more easily understood. I'm thinking something like: My SO is financially savvy and still I do this about twice a year; it's helpful for both of us to have a quick summary of what's coming in, what's going out, and what we've got. Once the ignorance is gone, then start working on the fear. It sounds like the fear comes from a betrayal of trust, so it's not just enough to be trustworthy, you've got to consistently appear trustworthy. A great way to do that is to keep doing what I already suggested: on a regular, ongoing basis inform SO of how you are doing financially. When SO sees that net worth is consistently improving over time, that you are not one bad decision away from poverty, the fear should diminish. Expect this to take a long time." "I had the same thing happen to my house. I bought it in 2011 for 137,000, which was the same as the FHA appraised value (because FHA won't guarantee a loan for more than their appraiser thinks its worth). January of last year, I get the letter from the tax office and see that my house has been assessed at only 122,000. I was shocked too, until I read a similar document that Phil told you to read. The short of it is, no matter what the tax assessor calls their calculation, it is an assessment. It was mass-produced along with everyone else's in your neighborhood by looking at its specs on paper (acreage, house square footage, age, beds/baths) and by driving by your home to see its general condition. The fact that your lawn may be less well-kept than the last time they drove by could have affected the decision a little. It's very unlikely to have been a major determinant of the assessment. The assessment value affects taxes, and taxes only. It is, in most states, a matter of public record, and so it could be used by a potential buyer to negotiate a lower price. However, everyone in the housing business knows that the assessed value is not the market value, and the buyer's agent will be encouraging their client to make a more realistic bid. This ""assessed value"" is not an ""appraisal value"". An appraisal is done by someone actually walking into and through your home, inspecting the general condition inside and out, to try to make a fair evaluation of what the home is actually worth. That number is almost always going to be more than the assessment value, because it takes into account all the amenities of the home; the current fixtures, the well-kept (or recently-replaced) flooring, the energy-efficient HVAC and hot water system, etc etc. It also takes into account recent comparables; what have other houses, with the same general statistics, the same amenities, relatively close in location, sold for recently? That will still generally be different from the true market value of the home. That value is nothing more or less than what a potential buyer will pay to have it at the time you decide to sell it, and that in turn depends 100% on your potential buyers' myriad situations. Someone may lowball even the assessed value because they're looking for a deal and hoping you're desperate; you just reject the offer. Someone may be looking at comparables indicating the house is maybe overpriced by $10k. You can counter and try to come to an agreement. Or, your potential buyer could work five minutes from your house, and be willing to pay at or above your asking price because the next best possibility is another 10 miles away. Since you aren't looking to sell the home, none of this matters, except to determine any escrow payments you might be making towards property taxes. Just keep making your mortgage payment, and don't worry about it. If you really wanted to, you could petition the state for a second opinion, but you think the value should be higher; if they agree with you, they'll raise the assessed value and you'll pay more in taxes. Why in the world would you want to do that?" Some advice from my side:  - You can get your tax up to 4 years back,  - The prices of tax advisory in Munich (for basic tax declaration) vary from 36 € up to 170 € - Depends how much your earn. Here you can calculate the the price for yourself: http://getdoido.com/tax_declaration If you want to know more how to do the tax declaration by yourself then check my last blog post where I described step-by-step how to make a tax declaration by yourself in Germany :) If you're willing to use OFX or QIF files, most Canadian banks can spit output more data than 90 days. The files are typically used to import into Quicken-like local programs, but can be easily parsed for your webapp, I imagine. "Can I write off the $56,000 based on demand letters? Or do I need to   finish suing him to write-off the loss? No and no. You didn't pay taxes on the money (since you didn't file tax returns...), so what are you writing off? If you didn't get the income - you didn't get the income. Nothing to write off. Individuals in the US are usually cash-based, so you don't write off income ""accrued but never received"" since you don't pay taxes on accrued income, only income you've actually received. Should I file the 2012 taxes now? Or wait until the lawsuit finishes? You should have filed by April 2013, more than a year ago. You might have asked for an extension till October 2013, more than half a year ago. Now - you're very very late, and should file your tax return ASAP. If you have some tax due - you're going to get hit with high penalties for underpaying and late filing. If the lawsuit finishes in 2014, does it apply to the 2012 taxes? Probably not, but talk to your lawyer. In any case - it is irrelevant to the question whether to file the tax return or not. If because of the lawsuit results something changes - you file an amended return." "Let's say you should have paid $4000 in taxes in a year, but you paid $5000, so you get a tax return of $1000. ""Somebody"" thinks that you should have tried to only pay $4000 in the year and get zero tax return. I hope he or she doesn't think you should pay $5000 and mess up your tax return so you get no refund.  Once the end of the tax year is there, you should do what you can to get as much tax returned as possible. On the other hand, you should also have tried to pay less during the year - obviously every dollar you paid less is a dollar less refund."