Frequently Asked Questions

1. How long do I have to keep records?
2. What is the standard mileage rate?
3. Do I have to pay tax on the money I inherited?
4. My neighbor says you can deduct up to $13,000 in gifted funds to your children each year. It this true?
5. Since I don't have the money to pay the tax I owe, may I just file an extension?

1. How long do I have to keep records?

Cancelled checks	7 years
Bank deposit slips	7 years
Bank statements	7 years
Tax returns	Permanent
Employment tax returns	7 years
Expense reports	7 years
Entertainment records	7 years
Financial statements	Permanent
Contracts	Permanent
Minutes of meetings	Life of company plus 7 years
Corporate stock records	Permanent
Employee records	Period of employment plus 7 years
Depreciation schedules	Life of company plus 7 years
Real estate records	Permanent
Journal & general ledger	Life of business plus 7 years
Inventory records	7 years
Home improvement records	Ownership period plus 7 years
Investment records	Ownership period plus 7 years

2. What is the standard mileage rate?

Answer: For 2009, the standard mileage rate for cars used in business is 55 cents per mile; for moving expense and medical miles it is 24 cents per mile; and for charitable miles it is 14 cents per mile.

3. Do I have to pay tax on the money I inherited?

Answer: Most often you do not have to pay tax on money you inherit. It does, however, depend on where the money comes from. If you have inherited an IRA or an annuity, you will be subject to tax as you receive it. Sometimes, from the date of death until the distributions are made to the heirs, income is earned on the estate assets. This would be taxable to you. But as a general rule, no, the money you inherit is not taxable.

4. My neighbor says you can deduct up to $13,000 in gifted funds to your children each year. It this true?

Answer: Unfortunately, no, this is not true. You can make a nontaxable gift of $13,000 (per 2009 limits) to anyone you choose, not just your children, each year, but nontaxable is different than deductible. Nontaxable means your children do not have to declare the $13,000 as income and pay tax and you do not have to pay a gift tax on it. There is no charitable deduction for you as the donor of such a gift.

5. Since I don't have the money to pay the tax I owe, may I just file an extension?

Answer: An extension gives you additional time to file your tax return only. It does not give you additional time to pay your tax. You will be subject to interest and possibly penalty charges if you do not pay your tax by the original filing date.

Location & Contact Info

Quick Links & Tax News

2009 Year-End Tax Planning

CCH Tax Legislation Coverage

IRS Forms and Publications

IRS COBRA Subsidy Q & A

End-of-Life Planning Guide

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