Make tax time easier by organizing your records now - KWWL - Eastern Iowa Breaking News, Weather, Closings

Make tax time easier by organizing your records now

Financial Tip of the Week from the Iowa Bankers Association:

Good record keeping is a crucial way to make your life easier – and reduce your stress level – when tax time rolls around. The Internal Revenue Service (IRS) is reminding taxpayers that this time of year is a great time to start planning for tax season by getting your records in good order. Maintaining a proper record of important documents – and keeping those documents organized – will help ensure all of your tax information is as accurate as possible. It also ensures that you'll be able to answer questions if your return is selected for examination or prepare a response if you receive an IRS notice.

Generally speaking, the IRS recommends keeping any and all documents that may have an impact on your federal tax return. According to the IRS, 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
  • Individual Retirement Arrangement 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 record keeping, check out IRS Publications 552, Record keeping for Individuals; 583, Starting a Business and Keeping Records; and Publication 463, Travel, Entertainment, Gift, and Car Expenses. These publications are available at www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Note: This information is provided by the Iowa Bankers Association (IBA) based on information available from the Internal Revenue Service (IRS). The information is not intended as legal or tax advice, and readers should consult a tax professional or the IRS with specific questions. For more tax information from the IRS, visit www.IRS.gov.

 

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