Tax Day rolls around every year on April 15, but after you’ve filed, you likely put your taxes out of your mind. However, there are certain documents you should definitely hold on to year after year. What are these documents?
- Tax Return Filings.
Whether you have paper copies or electronic copies, you will want to hold onto your tax returns. These can come in handy, especially if you are seeking a loan or trying to rent a house or apartment. Be sure you have tax returns for at least the last seven years. You may want to invest in a fireproof safe to protect any forms.
- Any Income Forms
These include your W-2s and 1099 forms you received at the end of the year. Hold onto them along with your tax return filings, because you’ll need them in case of an audit. It’s tough to recreate your income out of thin air, and auditors want more than tax returns to prove you made what you said you made.
- Your Receipts and Expenses
Are you asking for deductions on the taxes you owe based on expenses, such as for your home-based business? You should hold onto your receipts and other documentation that back your expense claims. This way, you’ll have solid evidence you spent the money in a given year.
- Information on Quarterly Tax Payments
Do you make quarterly tax payments to federal, state and/or local entities? Be sure to track how much you paid and when. This can be critical if you’re questioned in the future.
No one likes to hold onto documents unnecessarily, but it’s best to have all your tax forms — just in case. When in doubt, check out federal and local tax guidelines for more information rather than simply throwing something away. Oh, and be sure you back up all your files if you store your taxes on your computer.
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