From Carol McAtee & Associates, CPA office in St. Petersburg, FL- Keep copies of all filed tax returns as a part of your tax records. They can help in the preparation of future tax returns and will be needed if an amended return is to be filed.
All tax filers MUST keep records to support items reported on their income tax return. Keep basic records that relate to the preparation of the federal tax return for at least three years. Basic records are documents that prove income and expenses. This includes income information such as Forms W-2 and 1099. It also includes information that supports tax credits or deductions claimed. This might include sales slips, credit card receipts and other proofs of payment, invoices, cancelled checks, bank statements and mileage logs.
If you own a home or investment property, keep records of the purchases and other related records. Typically, the records should be kept; including home improvements, at least three years AFTER the property has been sold.
If you own a business, keep records that show total receipts, proof of purchases, business expenses and assets. These may include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices. Also include credit card receipts, sales slips, cancelled checks, account statements and petty cash slips. Electronic records can include databases, saved files, emails, instant messages, faxes and voice messages.
If you own a business with employees, keep all employment-related tax records for at least four years after the tax is due, or after tax is paid, whichever is later.
The IRS doesn’t require any special method to keep records, but it’s a good idea to keep them organized and in one place. This will make it easier to prepare and file a complete and accurate return. The documentation will also be readily available if there are questions about the tax return after it has been filed.
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
