Taxes are done…are you?

April 20, 2009

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I figured I would give you all a few days to breathe and not think about taxes…

You are probably thinking “will she stop talking about taxes already.”  Well, unless you have put away your 2008 documents  in an organized fashion and shredded what you don’t need, then you are not done.  Consider lessons learned from this past year.  Do you need to set up a more efficient system for 2009?  Do you need to track any expenses in a different way?  Set systems in place now to make the process easier next year.

That is what I am going to do this morning before I head out to work.  Here is how it works at my house.

  • All back up documents and receipts I need to retain are put in a clear bin.  Label indicating the year is adhered to the front.  I keep mine in a closet in my office.  High shelf that is hard to use for anything else.
  • I will be shredding any receipts and documents I do not have to keep for tax record keeping purposes.
  • I keep a copy of my tax forms submitted to the IRS and State in a file in my filing cabinet by year.

So what do we keep?  It can be different for different people –based on what you claim on your taxes. You should check with your tax professional but the general rule is keep tax back up for 7 years.  I hear 3 years, I hear 7years.  Here is the scoop.  The IRS has 3 years to audit you for cause or a random audit.  But if the suspect someone has done something fraudulently then they can go back further.

You  want to keep anything that is back up to what you claim on your taxes.  I always think of it this way.  If I got a call from the IRS about an audit, I will need to show them a receipt or documentation for anything I have claimed.  Those are the receipts that should be in the “tax box.”  If you have receipts for expenses that are not claimed on your taxes, before you toss or shred, consider if you need them for any other purpose:

  • Insurance
  • Warranty
  • Legal

Be sure to check with your accountant or investment representative to see what you need to keep regarding your investments.  There are specific requirements relating to buying and selling of stock.

Here are a few links that can help you as well.

IRS – Record Retention

What to Keep

Ok, now I’ll stop talking about taxes!

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