Benefits of Keeping Good Records:
As a taxpayer, you need to know and understand your tax responsibilities. And one responsibility is keeping good records.
The IRS does not require you to keep your records in a particular way. But, you must keep proper records that allows you and the IRS to determine your correct tax. You also need to keep documents that can help prove your income, expense deductions, and tax credits. You also need to keep records that will help prove that the expense or credit item is allowable on your tax return.
You should also keep copies of your tax returns as part of your records. They will be helpful to prepare future returns, and you will need them if you file an amended tax return. They can also be helpful to your survivor or the executor or administrator of your estate.
Time spent on keeping good tax records is time well spent.
Keeping good records will help you better plan and prepare your taxes and save you time and money.
You need good records to prepare an accurate and complete tax return ready to stand up to any IRS challegne or scrutiny.
Well organized records enable a tax preparer to prepare your return for you in a reasonable amount of time and for a lower cost.
If you're audited by the IRS, it will be up to you to prove that you have accurately reported your income and expenses on your tax return. A complete set of records will help speed up the audit, save you time, money, frustration, and stress, and increase your chance of a successful outcome. If you fail to have proper records, the IRS auditor could disallow your deductions. You may owe additional tax plus penalties and interest charges.
With proper records, preparing your taxes will be less frustrating and less stressful.
You'll make well informed tax decisions and avoid common tax mistakes.
You'll fell more confident and be in control of your taxes.
You'll save time and money at tax time
How Long To Keep Records?
You must keep for your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. This means you must keep records that support items shown on your tax return until the period of limitations for that return runs out.
The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax.
I always recommend keeping tax returns and records indefinitely.
They usually do not take up much space and you'll have peace on mind if that dreaded IRS audit notice ever arrives in the mail.
TAX TIP: If you hire a bookkeeper or outsource your bookkeeping, don't just hire anyone claiming to be a bookkeeper. Check references. Learn enough about your own records so that you can tell whether the bookkeeper knows what they are doing. Reivew your books EVERY Month. Remember, the IRS holds you, the taxpayer, and not your bookkeeper, responsible for any errors or problems with your bookkeeping responsibilities.
CALL NOW 561-746-1926 or 561-339-8102 if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax-Saving Consultation.