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Hans On Organizing Record Keeping Tips:
Why Keep Records?
Tax purposes - To file quickly and accurately. To support the information reported on
a tax return in the event of an audit from the IRS.
Insurance purposes - To prove the value of the property by proving the original cost
and receipts for improvements you have made
Getting a loan - To identify the sources of your income.
Records to Keep
Checkbook - For a record of your income and expenses. In your checkbook register
you should record amounts, sources of deposits, and types of expenses.
Receipts and sales slips - To help prove a deduction you have taken on your taxes.
If you use a computerized record keeping system, you must be able to produce legible
records of the information needed to determine your correct tax liability. In addition to
your computerized records, you must keep proof of payment, receipts, and other
documents to prove the amounts shown on your tax return.
Copies of tax returns. You should keep copies of your tax returns as part of your tax
records. They can help you prepare future tax returns, and you will need them if you
file an amended return. Copies of your returns and other records can be helpful to
your survivor or the executor or administrator of your estate.
How to Keep your Records
Keep your records in an orderly fashion and in a safe place.
Keep them by year and type of income or expense. Store records related to a
particular item in a folder or envelope.
How Long to Keep Records
Keeping records for non-tax purposes. When your records are no longer needed for
tax purposes, do not discard them until you check to see if they should be kept longer
for other purposes. Your insurance company or creditors may require you to keep
certain records longer than the IRS does.
Tax purposes - To file quickly and accurately. To support the information reported on
a tax return in the event of an audit from the IRS.
Insurance purposes - To prove the value of the property by proving the original cost
and receipts for improvements you have made
Getting a loan - To identify the sources of your income.
Records to Keep
Checkbook - For a record of your income and expenses. In your checkbook register
you should record amounts, sources of deposits, and types of expenses.
Receipts and sales slips - To help prove a deduction you have taken on your taxes.
If you use a computerized record keeping system, you must be able to produce legible
records of the information needed to determine your correct tax liability. In addition to
your computerized records, you must keep proof of payment, receipts, and other
documents to prove the amounts shown on your tax return.
Copies of tax returns. You should keep copies of your tax returns as part of your tax
records. They can help you prepare future tax returns, and you will need them if you
file an amended return. Copies of your returns and other records can be helpful to
your survivor or the executor or administrator of your estate.
How to Keep your Records
Keep your records in an orderly fashion and in a safe place.
Keep them by year and type of income or expense. Store records related to a
particular item in a folder or envelope.
How Long to Keep Records
Keeping records for non-tax purposes. When your records are no longer needed for
tax purposes, do not discard them until you check to see if they should be kept longer
for other purposes. Your insurance company or creditors may require you to keep
certain records longer than the IRS does.
Helen Hanson,
Professional Organizer
Professional Organizer
| If you: |
The period is: |
|
| 1 |
Owe additional tax and (2), (3), and (4) do not apply to you |
3 years |
| 2 |
Do not report income that you should and it is more than 25% of the gross income shown on your return |
6 years |
| 3 |
File a fraudulent return |
No Limit |
| 4 |
Do not file a return |
No Limit |
| 5 |
File a claim for credit or refund after you filed your return |
Later of 3 years or 2 years after tax was paid. |
| 6 |
File a claim for a loss from worthless securities |
7 years |