Keep detailed records of your income, expenses, and other information you report on your tax return. A good set of records can help you save money when you do your taxes and will be your trusty ally in case you are audited. For businesses, receipts for any purchase or expenditures should be kept. An electronic copy is acceptable. For individuals, w-2s, 1099s, mortgage interest statements, receipts for charitable contributions and any other documentation needed to report income and deductions.

Keep records of all your current year income and deductible expenses. These are the records that an auditor will ask for if the IRS selects you for an audit. Here's a list of the kinds of tax records and receipts to keep that relate to your current year income and deductions: Income (wages, interest/dividends, etc.) Exemptions (cost of support) Medical expenses Taxes Interest Charitable contributions Child care Business expenses Professional and union dues Uniforms and job supplies Education, if it is deductible for income taxes Automobile, if you use your automobile for deductible activities, such as business or charity Travel, if you travel for business and are able to deduct the costs on your…

Typically, if the IRS pulls a return for an audit they will look at the previous 3 years, however, if they find an irregularity they will go back 6 years. And if they determine the irregularity to be fraudulent they can go back as far as they want. The best rule of thumb is to keep records for at least 7 years.

Yes, keep your old tax returns. One of the benefits of keeping your tax returns from year to year is that you can look at last year's return while preparing this year's. It's a handy reference and reminds you of deductions you may have forgotten. Another reason to keep your old tax returns is that there may be information in an old return that you need later. Audits and your old tax returns Here's a reason to keep your old returns that may surprise you. If the IRS calls you in for an audit, the examiner will more than likely ask you to bring…

You need to keep some other types of tax records and receipts because they tell you how much you paid for something that you may later sell. Keep the following types of records: Records of capital assets, such as coin and antique collections, jewelry, stocks, and bonds. Records regarding the purchase and improvements to your home. Records regarding the purchase, maintenance, and improvements to your rental or investment property. How long should I keep these records? You need to keep these records as long as you own the item so you can prove the cost you use to figure your gain or loss when you…

There are other records you should keep, even though they don't appear to have any use for your tax returns. Here are a few examples: Insurance policies, to show whether you were to be reimbursed in case you suffer a casualty or theft loss, have medical expenses, or have certain business losses. Records of major purchases, in case you suffer a casualty or theft loss, contribute something of value to a charity or sell it. Family records, such as marriage licenses, birth certificates, adoption papers, divorce agreements, in case you need to prove change in filing status or dependency exemption claims. Certain records that…

Unless you own or operate your own business, partnership, or S corporation, recordkeeping does not have to be fancy. Your recordkeeping system can be as casual as storing receipts in a box until the end of the year, then transferring the records, along with a copy of the tax return you file, to an envelope or file folder for longer storage. To make it easy on yourself, you might want to separate your records and receipts into categories, and file them in labeled envelopes or folders. It's also helpful to keep each year's records separate and clearly labeled. If you have your own…