10-26-11 How to Keep Good Records to Avoid Stress at Tax Time

How to Keep Good Records to Reduce Stress at Tax Time


Although tax season is a few months away, now is a good time to make sure you are keeping the records that you need for your returns. Keeping your records organized can help make preparing taxes easier, and help you remember items that are relevant to your return. Although there are no specific rules on how you keep your records, it is important to have then all in one place.


For an individual, see below for important items to set aside for taxes. These should be kept for three years:

  1. Invoices
  2. Bills
  3. Expense Receipts
  4. Mileage information
  5. Cancelled checks
  6. Anything else that may support a relevant occurrence for your taxes.


Regarding property, the following should be kept for three years after that date the property was disposed of:

  1. Paperwork referencing a home purchase/improvement
  2. Stocks/investments
  3. IRA deposits/withdrawals
  4. Records regarding rental properties


Small Business owners should keep the following records for four years:

  1. Income receipts
  2. Proofs of expense purchases
  3. Documents showing expenses
  4. Proof of assets

(1) IRS. Internal Revenue Service 26 August 2011
 
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