Managing Your Tax Records

Ok, so your taxes are now filed. Woo hoo! This is a real cause for celebration. But what do you do now with your tax paperwork for this year? Use it to line your hamster cage?

The IRS has other ideas. Follow these tips from the IRS and you’ll be sure to keep the proper records:

1. Keep your tax records for three years (for you pack rats out there, longer is okay, too).

2. Documents related to capital transactions, such as a home purchase or sale, stock transactions, rental or business property, or retirement related assets, such as IRAs or 401ks, should be kept longer.

3. Documents may be kept in either paper or electronic form. The IRS suggests you keep any and all documents that may have an impact on your federal tax return.

4. Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.

5. For more info on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which can be found at http://www.irs.gov. We also have a handy Business Record Retention Schedule on our website, which you can find by clicking here. In this document we recommend how long to keep certain documents based on what category they fall under. (Please note: some documents should be kept permanently!)

If you are maintaining paper files of your tax documents, be sure to have a backup system in place in case you experience paper file loss. Your accountant may be able to offer you a paperless storage system or file backup solution to ensure you have quick, easy access to your tax documents in the future.