| One of the most confusing aspects of taxes is tax | | | | If you own property or a business then it is a good |
| records. How long is one supposed to keep these | | | | idea to keep these tax records separate from your |
| important records is often up for debate and most | | | | personal tax papers. A separate file will suffice. Be |
| people do not bother saving them all. | | | | sure to keep all documents that you need and |
| The first thing that should be noted is that one | | | | remember that there are different documents |
| should do more than keep their actual tax returns. It | | | | needed for different forms of filings. |
| is just as important to keep your receipts and other | | | | Property records to keep for example are |
| documents like bank statements that support the | | | | documents such as records of home improvements |
| things you have put onto your tax forms. One is | | | | made over the years you have owned the home or |
| really just as important as the other. | | | | property. These can affect many aspects of taxes, |
| Audits do happen and in case they happen to you, it | | | | such as the value of the home and what is can or |
| is important that you have all of the documentation | | | | has sold for and your taxable gain. Mortgage |
| that you need in a handy place at home. It is wise to | | | | statements are another important piece of |
| consider starting a file either in a file cabinet or | | | | documentation to keep on hand. |
| perhaps on a shelf or even in a drawer. Keep these | | | | Forms such as W-2s must be kept as these are the |
| important tax documents separate from other | | | | forms that show the amount of money you have |
| papers to avoid confusion and loss. | | | | earned and the tax you have already paid on it. 1099 |
| If you choose to file electronically online-as more and | | | | forms on the other hand show the money earned |
| more people are beginning to do-you need to | | | | from other sources such as investments and interest. |
| remember to request hard copies of these | | | | Both of these will be things needed to verify the |
| documents right away. They can often be mailed to | | | | information you have stated on your tax returns and |
| you quite quickly. | | | | they will be some of the first documents that the |
| IRS audits are not the only reason why it is | | | | IRS asks to see in the case of an audit. |
| important for people to keep good tax records. | | | | The bottom line is that the IRS has years to audit |
| There is also divorce. Unfortunately many people do | | | | you. IF they fear there has been fraud committed on |
| not stay married and when you do get divorced it | | | | your tax returns they can audit you at any time, |
| can get ugly. Assets can be complicated to divide and | | | | even if it is ten years later. You should keep your tax |
| having a good tax records with all of the appropriate | | | | records for at least that long, many experts will |
| documents on hand can be a real asset to you and | | | | recommend that you keep them indefinitely. |
| your own personal finances. | | | | |