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Keeping
track of you tax records is not high on everyone’s priority list, but
doing so can save frustration in the future.
Every
year, taxpayers spend numerous hours gathering their tax records to have
their tax return prepared. Time
saving techniques can help make this job easier.
By filing your tax records throughout the year in one place, all your
records will be ready for tax preparation time.
Don’t forget to put your year end forms in the same place
(1099’s, W-2’s, etc.).
Once
your tax return has been filed, don’t throw your records away.
The IRS recommends that taxpayers keep their records for three years.
Under most circumstances, the IRS has three years after a return has
been filed to conduct an audit. If
you don’t have your records or cannot substantiate a deduction, the IRS
will disallow that deduction.
Certain
records should be kept longer than three years.
Same examples include stock purchases, home purchases and sales, IRA
information, information related to business or rental property and the
basis of ownerships in other entities.
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