You may not be thinking about your tax return right now, but now is a great time to start planning for next year and to make sure your records are organized. Maintaining good records now can make filing your return a lot easier and it will help you remember transactions you made during the year.
In most cases, the IRS does not require you to keep records in any specific manner. However, you should keep all documents that may have an impact on your federal tax return.
Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:
- Bills
- Credit card and other receipts
- Invoices
- Mileage logs
- Canceled, imaged or substitute checks or any other proof of payment
- Any other records to support deductions or credits you claim on your return
You should normally keep records relating to property until at least three years after you sell or otherwise dispose of the property. Examples include:
- A home purchase or improvement
- Stocks and other investments
- IRA transactions
- Rental property records
If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:
- Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
- Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
- Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
- Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks
For more information about recordkeeping, see IRS Publications 552: Recordkeeping for Individuals, 583: Starting a Business and Keeping Records, and Publication 463: Travel, Entertainment, Gift, and Car Expenses. These publications are available at IRS.gov or by calling 800-829-3676.
If you have any questions please call us at 610-485-1010.
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This is a guest blog by Jacqueline M. Ward, who is the Tax Operations Manager (TOM) at "Your Best Interest" Financial Services Inc. She combines her education in accounting, years of experience and attention to detail to provide her clients with confidence and peace of mind that their tax returns are completed accurately and in a timely manner. Jackie is the mother of 7 children, 2 girls and 5 boys. Two of her sons are presently serving our country in the military; one in the U.S. Marine Corps and the other a midshipman at the United States Naval Academy.
To contact Jackie call 610 485-1010 or email her at jward@ybifs.com
