Although the upcoming holidays may be the biggest stress you’re thinking about right now, you can greatly reduce your holiday AND tax stress by getting organized and keeping good records.
Here are some tips to get you organized for tax time (and some are good tips for the holiday season as well).
Individual taxpayers should usually keep the following records that support their tax returns for at least three years:
- Bills
- Invoices
- Credit card and other receipts
- 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
- Stocks and other investments
- Individual Retirement Arrangement transactions
Generally speaking, keep records relating to properties until at least three years after you sell or otherwise dispose of the property.
- A home purchase or improvement
- 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. 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
