Record Keeping Tips for Individuals and Small Business Owners

Here are a few things the IRS wants you to know about recordkeeping. Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you are billed for additional tax. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, you should keep any and all documents that may have an impact on your federal tax return. Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years: o Bills o Credit card and other receipts o Invoices o Mileage logs o Canceled, imaged or substitute checks or any other proof of payment o Any other records to support deductions or credits you claim on your return You should normally keep records relating to property until at least three years after you sell or otherwise dispose of the property. Examples include: o A home purchase or improvement o Stocks and other investments o Individual Retirement Arrangement transactions o Rental property records