Purposeful Recordkeeping Reduces Tax-Time Stress

We all know how stressful it can be
when you wait until the last minute to prepare your taxes, and you
are probably not thinking about it now, during the summer months,
but summer is a great time to start planning for next year. 
Keeping good records will reduce tax-time stress, and here are a
few tips to help.

1. In most cases, the IRS does not require you to keep records
in any special manner. Generally, you should keep any and all
documents that may have an impact on your federal tax return. It’s
a good idea to have a designated place for tax documents and
receipts.

2. 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
• 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
• Stocks and other investments
• IRA transactions
• Rental property records

3. 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 receipts,
  credit card sales slips and invoices
• Expense documents: Canceled checks, cash register receipts,
  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

For more information about recordkeeping, check out IRS
Publication 552, Recordkeeping for Individuals, Publication 583, Starting a Business and Keeping
Records, and Publication 463, Travel, Entertainment, Gift, and
Car Expenses. These publications are available at www.IRS.gov or by
calling 800-TAX-FORM (800-829-3676).