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Tax Tip: Recordkeeping Becomes Key at Tax Time

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By Admin on January 20, 2009 9:05 AM

You probably already keep records in your daily routine, including receipts and bank statements. When April 15th approaches and you start getting your income tax information together, these records and others become extremely important in preparing a complete and accurate tax return. The Internal Revenue Service (IRS) offers tips on recordkeeping for taxpayers: why you should keep records, what to keep, and for how long.

Keeping important records with an eye towards tax time can help you identify sources of taxable versus non-taxable income, keep track of expenses for which you might be able to claim a deduction, trace the basis of property ownership and improvements, and provide support for items reported on your tax return. The specific types of records you should keep include any documents related to: child support and alimony paid or received; business use of your home; losses from casualty and theft; education expenses; gambling winnings and losses; and moving expenses. Typically, you should plan on keeping these records for at least three years, but certain kinds of records should be kept longer. For complete information, read What Tax Records to Keep and Recordkeeping for Individuals from the IRS.