What to Do with Stock Sale Records in Naples

When tax season comes around, most individuals usually don’t know which documents are important and which documents they don’t need.

More specifically, taxpayers are typically unaware of how to handle stock sale records.

Why You Should Keep Important Financial Documents

It’s vital to keep important financial documents safe in case the IRS comes asking for information. When the IRS requests an audit, they’ll ask for forms that show wages, income, interest, dividends, and capital gains.

Since capital gains are shown in stock sale records, it’s important to keep these documents somewhere safe and accessible.

What Is an Audit?

When the IRS conducts an audit, they will scan through all the books of accounts, financial transactions, statutory records, and so forth.

Their goal is to determine whether all of the information is correctly reported according to tax laws and confirm the reported amount of tax is correct.

If you’re a merchant, the IRS will request:

• Payroll reports
• List of every bank account used
• List of all transactions
• The general ledger
• Trial balance of the company
• Confirmations
• Schedules
• Copies of all legal documents
• Loan documents

As you can see, keeping your financial documents in a safe place can save you a lot of trouble in the future.

How Long to Keep Stock Sale Records

In general, the IRS will only request documents up to three years back. However, they may require more information if they notice a “substantial error,” but usually don’t go past six years. 

A “substantial error” is when the IRS believes you have substantially underreported your income by 25% or more, or the IRS suspects there may be fraud.

For this reason, it’s recommended to keep important financial documents such as stock sale records safe and secure for at least six years. Then, you won’t have to worry if the IRS conducts an audit.

In terms of storage, we recommend keeping the stock record sales in a fire-proof safe or investing in a safety deposit box. Furthermore, you could convert it into a password-protected electronic file and then destroy the original document.

Destroy Documents Safely with ShredQuick

After you’ve been audited or six years have passed since the stock sales, you may want to destroy the stock sale records. Needless to say, you wouldn’t want that sensitive financial information getting into the wrong hands. 

Luckily for you, ShredQuick will come wherever you are in Naples and securely shred your confidential documents at your on-site location. Call us today or request a free quote online for any and all shredding needs.