Frequently Asked Questions

How long should I keep my tax records?

This is a commonly asked question. Unfortunately, there is no one right answer since laws vary form state to state. What may be appropriate from a tax standpoint might differ from what is appropriate in civil matters such as lawsuits, collection issues, damages, etc. The following guidelines are from a federal tax standpoint and assume that you have “played by the rules” in reporting your income and deductions.

We recommend that you keep your records in a protected place, safe from fire, flood, etc. In case of emergency, it is important that someone you trust knows the location of your records. If you are ever in doubt as to how long you should keep a document, consult your tax advisor or attorney, or follow the age old rule: WHEN IN DOUBT, DON’T THROW IT OUT!

Item Holding Period From Filing Date
Tax returns Permanent
Canceled checks 3 years
Bank deposit slips 3 years
Bank statements 6 years
Travel & entertainment reports 3 years
W-2’s, 1099’s, 1098’s 6 years
Proof of tax return deductions 6 years
Credit card slips & statements 3 years
Closing papers on property 3 years beyond the year you sell the property
Capital expenditures & improvements 3 years beyond the year you sell the property
Security sales & purchase slips 3 years beyond the year you sell the security
Financial contracts 6 years beyond the final year of contract
Insurance policies 6 years beyond the final year of contract
IRA’s & other retirement information Permanent

Is my TIAA/CREF pension taxable income?

If you receive TIAA/CREF pension distributions attributable to employment with New York State, the payments are exempt from New York State personal income tax. The portion of these payments attributed to employment by an employer other than New York State, such as a university, or attributed to a supplemental annuity plan, usually do not qualify for the same exclusion. They may qualify, up to a maximum of $20,000, under a separate exclusion section of New York State law. Contact TIAA/CREF and ask them to provide a breakdown of the source of the contributions to your plan if you have had multiple employers contributing.

Are “points” paid on refinancing my home tax-deductible?

In general, to deduct “points” paid in connection with a residential mortgage, the points must be “qualified residence interest.” In addition, even where “points” are deductible, certain other requirements must be satisfied in order to deduct them in the year they are paid as opposed to the “points” being written off over the term of the mortgage.

In order for interest (including points) paid when refinancing a mortgage to be considered “qualified residence interest,” the mortgage must be with respect to, and secured by, either your principal residence or one second residence which you select. In addition, the mortgage proceeds must either be used to make substantial improvements to the home, or must not exceed the principal amount of your old mortgage by more than $100,000 ($50,000 if you are married and file a separate return).

Even where “points” paid on refinancing are “qualified residence interest,” they will only be deductible in the year paid (1) if they relate to your principal residence not a second residence; (2) they are consistent with local business practice on this type of loan; and (3) they relate to the portion of the mortgage used to finance improvements to the home.

In other words, “points” attributable to the portion of the new mortgage used to repay the old mortgage cannot be deducted when they are paid, but may be deducted over the life of the new mortgage (or when the loan is paid off). Similarly, to the extent the proceeds of the new mortgage exceed the principal amount of the old mortgage and are used for purposes other than improving the property, no current deduction is permitted. However, the points may be deducted over the term of the new loan to the extent the excess principal amount does not exceed $100,000.

Another important point to remember is that if a refinanced mortgage is subsequently refinanced again, the unamortized points on the first refinancing can then be deducted currently.

I do a lot of business travel and regularly use my laptop. Do you have any suggestions on how to prolong the battery life?

Batteries typically last between 2 and 3 hours before requiring a recharge. Try these ideas to help extend battery life: reduce the clock speed of the computer, lower the screen backlight brightness, reduce contrast controls, remove unneeded running components that are used infrequently since they drain power even when they are not in use, and disable the infra-red control panel.

Recently there have been several virus scares. What are the infection signs to look for?


Some infection signs are:

  • Unscheduled read/write operations to floppy disks, hard drives or both
  • Inability to save files to the A drive
  • Prolonged program load times, or computers that will not boot
  • Slow system operation
  • Unusual error messages
  • Inability of programs to execute functions
  • Increased program file sizes and existence of unfamiliar file names

What are the best requirements for my employees’ passwords?

Short, convenient passwords are one of the leading causes of computer security breaches. More effective passwords are at least eight characters and are a combination of numbers and letters, both upper-case and lower-case. Passwords should be changed every few months.

What is the difference between compiled, reviewed, and audited financial statements?

The primary difference between these three types of financial statement services (typically provided by an accountant) is the level of assurance.

In a compilation engagement, the accountant provides no assurance as to whether the financial statements are prepared in accordance with generally accepted accounting principles. A compilation presents, in the form of financial statements, information that is the representation of management.

In a review engagement, the accountant provides limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles.

In an audit engagement, the accountant renders an opinion that the financial statements are presented in accordance with generally accepted accounting principles.

Due to the different levels of assurance being provided by an accountant in the three types of engagements, the procedures necessary to complete each type of engagement are different.

In a compilation engagement, inquiries of management and client personnel are not required unless the information supplied to the accountant appears to be questionable.

In a review engagement, inquiries of management and client personnel are required by professional standards.

In an audit engagement, inquiries, analytical and other audit procedures are necessary to render an opinion.