Keeping Good Records Reduces Stress at Tax Time
By Houston TX CPA Jim Trippon, on the web at www.CPAHoustonTX.com
You may not be thinking about your tax return right now, but you might want to pay extra attention during the "off season" of tax season to start planning for next year and to make sure your records are organized. Maintaining good records now can make filing your return a lot easier and it will help you remember transactions you made during the year.
Here are a few things the IRS wants you to know about recordkeeping.
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Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you receive an IRS notice. In most cases, the IRS does not require you to keep records in any special manner.
Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.
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 (IRS Rules to Write Off Business Vehicles)
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 (IRS Rules On Deducting Business Use Of Your Home)
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
At Trippon & Co CPAs, we meet yearly with our clients to discuss their tax accounting and limiting tax liability practices in December of each year. We work hard for our clients to legally reduce their tax liability. If you are wondering if you are missing some important deductions, or want to know if there are ways to reduce your tax liability, give us a call today at 713-661-1040. Remember your first initial consultation is always FREE!
