Written by Hillsboro Free Press Tuesday, 02 February 2010 20:01
In most cases, people do not have to keep tax records in any special manner. Good recordkeeping will save time and help taxpayers remember the various transactions they made during the year.
“Records help you document the deductions you’ll claim on your return and will help if the IRS selects your return for examination,” said Michael Devine, IRS media relations.
Whether someone does their own taxes pays a professional to complete the return, having tax records in one place will make returns easier to complete and more accurate.
“Generally speaking,” he said, “you should keep any and all documents that may have an impact on your federal tax return.” Some examples include records of wages, salaries, tips and other taxable income such as interest, dividends, social security and other benefits.
Other documents could include bills, credit card and other receipts, invoices, mileage logs (for business and medical), canceled, imaged or substitute checks or any other proof of payment.
In addition, real estate records, charitable donation receipts and any other records to support deductions or credits someone would claim on their return.
Normally, tax records should be kept for three years, but some documents—such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property—should be kept longer.
For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, available on IRS.gov or call 800-829-3676. For more information and to access IRS news, forms and publications, go to the IRS.gov Web site.