There are many records you have that may help document items on your tax return. You'll need this documentation should the IRS select your return for examination. Tax Tip 2010-71 lists five tips from the IRS about keeping good records.
1. Normally, tax records should be kept for three years.
2. Some documents -- such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property -- should be kept longer.
In most cases, the IRS does not require you to keep records in any special manner.3. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
4. Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
5. For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Posted by Joshua Hock, Associate Editor, Wealth Strategies Journal
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