How long do I need to keep tax returns for after filing Schedule C this year?

If I made an honest mistake on my taxes from 5 years ago but didn't underreport by anywhere near 25%, am I still in the clear after 3 years? Also, what about electronic records - do I need printouts of everything or are digital copies acceptable?

For honest mistakes without substantial underreporting, the 3-year statute of limitations would generally protect you. Once that period expires, the IRS typically can't examine that return anymore unless one of the exceptions applies. Digital copies are absolutely acceptable - the IRS actually prefers electronic records in many cases. Just make sure your electronic storage is secure, backed up, and the files remain accessible. If you switch computers or storage methods, ensure you can still open those files years later if needed.

Does it actually analyze the details of your specific tax situation or is it just general advice? I've got a similar situation with a mix of W-2 and 1099 income plus some investment stuff and I'm drowning in paperwork.

I've tried other tax tools before and they just give generic advice you could find anywhere. How does this handle complex situations? I'm particularly worried about some home office deductions I took during the pandemic.

It definitely goes beyond general advice. The system looks at your actual tax documents and identifies specific risk factors in your returns. For example, it flagged that my home office deduction was slightly higher than average for my income level and recommended I keep those supporting documents for the full 6-year period. For your pandemic home office situation, it would analyze your specific deductions and compare them to IRS audit triggers, then give you personalized recommendations based on your actual tax data. It's not just a generic "keep everything for 7 years" type of advice you find everywhere online.

Wait, how does this actually work? Doesn't everyone have to suffer through the same IRS hold times? I've never heard of a service that can get you through faster.

This sounds like BS honestly. How could some third party service possibly get priority access to IRS agents when the rest of us wait for hours? If this was real, everyone would use it and then we'd all be back to waiting anyway.

It doesn't give you priority access or special treatment - it just automates the waiting process. The service calls the IRS and navigates through all the automated menus, then waits on hold for you. When an agent is about to pick up, it calls you and connects the calls. You're going through the same queue as everyone else, but you don't have to personally sit on hold listening to the terrible music. The reason everyone doesn't use it is simply because most people don't know about it. Think of it like having an assistant make the call and then transferring it to you when someone finally answers. It saved me literally hours of my life that I would've wasted listening to hold music.

Have you ever had to provide these digital records to the IRS? I'm worried they might not accept them during an actual audit. Also, what software do you use for the scanning and organization?

I had a correspondence audit two years ago, and they fully accepted my digital documentation without issue. I submitted everything electronically through their portal and it went smoothly. I use a combination of a decent scanner app on my phone for receipts on the go, and a document scanner with automatic feed for batch scanning larger documents. For organization, I create yearly folders with subfolders for income, expenses, deductions, etc. I'm careful to make sure everything is clearly labeled and searchable. Most important is having a solid backup system - I use both cloud storage and local backups.

What's the deal with property records? I bought a house in 2019 and have all those closing documents taking up space. Can I scan and shred those too?

Property records are definitely in the "keep until you sell the property plus 3 years" category. This includes all your closing documents, records of improvements, and anything that affects your basis in the home. For your 2019 home purchase, these documents are absolutely critical to keep. If you eventually sell the home, you'll need to prove your basis (purchase price plus improvements) to calculate any potential capital gains. While you can certainly scan these for convenience and backup, I'd actually recommend keeping the physical originals of major property documents in a fireproof safe. These are the few documents where having the originals can really matter, especially for title-related paperwork.