Along with planning, preparing and filing your tax return, you must also be sure to keep your tax records properly. When you file your tax return this tax season, make sure to keep a copy of it in your tax records. It is advisable to keep your tax records organized so that you know where to find each year’s tax documents.
You should keep electronic records on your computer along with physical copies. This will protect your important tax and financial documents in the case of theft, fire, etc. Even though organizing and keeping records is a pain, it makes things easier for you when you need the documents. Remember that the IRS may ask you to provide documentary proof of the claims you make on your tax return at anytime. It is essential to keep all important receipts of expenditures and of the income that you receive from every source.
To keep your records organized, create one file or folder for each year’s tax records. This will make it easy for you to update your current year’s file throughout the year and also sort through the documents in the future.
This year’s tax season will start on January 31st. Make sure that you prepare your tax return correctly and have the relevant documents to back up your claims.