Health & Fitness
Managing Your Tax Records After You Have Filed
Now that you've filed, what about records? You might consider some 2012 tax planning while the topic is still fresh in your mind.
So now that you've filed your 2011 taxes what about your records? Perhaps some 2012 tax planning now that you've filed for 2011?
As for the first question above, here are some thoughts:
Keeping good records after you file your taxes is a good idea as they will help you with documentation and substantiation should the IRS have a question about something, or... (gulp) select your return for an audit. Here are some thoughts:
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- Normally, tax records should be kept for three years.
- Some documents—such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property—should be kept longer. For example, if you own a rental home, then not a bad idea to keep everything (within reason) for as long as you are the owner of that property.
- For the most part, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
- 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.
- The IRS has a publication on Recordkeeping. In case useful, it is Publication 552, Recordkeeping for Individuals
As to the second question/thought from above, a little tax planning may go a long way in keeping the tax you pay closer to what is actually owed. Nobody (OK, a few of us would be?) is happy to write a check to the US Treasury but along those lines, getting a big refund is only overpaying your fair share and waiting to get it back in the form of a refund once a year. So what to do?
Spend a few moments and use these tools (IRS Witholding Calculator and IRS Pub. 919, How do I Adjust my Withholding) to see how you can get a better view of your tax situation as it relates to your entire financial situation. In other words, a small adjustment on your taxes done now may allow for less surprise later.
