Keeping Tax Records Could Save You When The Auditor Comes Knocking

To protect yourself from problems when facing an audit or other form of review, there are some basic rules involving good record-keeping.

First of all, there are the benefits arising from possible tax savings with good record keeping. If you itemize, you want to get the maximum number of deductions possible, and you want to be able to prove them.

By doing a good job of filing your receipts and other tax-related documents through the year, you may avoid headaches later when trying to round up information needed to complete your return accurately. If you wait until the filing deadline of April 15th to begin getting organized, it is probably too late.

Normally, tax records should be retained for three years from the due date of your return or when you file, whichever is later. That includes your copy of past years' tax returns. Professional tax experts suggest that documents be kept for between six to ten years, just to be on the safe side.