Dear Action Line: We were sitting around talking about which income tax stuff you should keep and which you can toss. We never could agree. Can you give us a hand? - L.G., Tulsa.
Summer never seems like the best time to worry about taxes, but keep in mind that some of the expenses you've paid over the past few months might qualify for money-saving tax credits or deductions at tax time. Rounding up documentation now - before it gets bagged up and tossed out - will make filing faster and easier later because your records will have been organized.
Filed returns: Keep copies of filed tax returns with tax records. They can help you prepare future tax returns. You'll also need them if you need to file an amended return.
Proof of income and expenses: Keep records to support items reported on your tax return. Keep basic records that relate to your federal tax return for at least three years.
Basic records are documents that prove your income and expenses. This includes income information such as Forms W-2 and 1099. It also includes information that supports tax credits or deductions you claimed. This might include sales slips, credit card receipts and other proofs of payment, invoices, canceled checks, bank statements and mileage logs.
Home improvements: When you own a home or investment property, keep records of your purchases and other records related to them. Hold on to these records, including home improvements, at least three years after you have sold or disposed of the property.
Business expenses: When you own a business, keep project receipts, proofs of purchase of business expenses and assets. These include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices. Include credit card receipts, sales slips, canceled checks, account statements and petty cash slips. Electronic records can include databases, saved files, emails, instant messages, faxes and voice messages.
Business employees: When you own a business with employees, keep all employment-related tax records for at least four years after the tax is due, or after the tax is paid, whichever is later.
One place: It's a good idea to keep records organized and in one place as this will make it easier for you to prepare and file a complete and accurate return. You'll also be better able to respond if there are questions about your tax return after you file.
Pub 17: More information on recordkeeping for individuals is in IRS "Publication 17, Your Federal Income Tax"
tulsaworld.com/IRSPub17 It is also available at 800-829-3676.
Submit Action Line questions by calling 918-699-8888, emailing
phil.mulkins@tulsaworld.com or by mailing them to Tulsa World Action Line, P.O. Box 1770, Tulsa, OK 74102-1770.
Original Print Headline: Save tax-related records, and save money
Action Line
Edmunds.com last week released its annual list of Best Used Cars for 2013, a list of 17 cars across every segment based on "the most important criteria: reliability, safety, value and availability."
Dear Action Line: I received a mailing from the IRS and wonder if this is typical. I thought all such notices came by email. Should I call the Tulsa IRS on this? - B.N., Tulsa
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