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Tips
Why Keep Records?
There are many reasons to keep records. In addition to tax
purposes, you may need to keep records for insurance purposes or
for getting a loan. Good records will help you:
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Monitor the progress of your business
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Prepare your financial statements
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Identify Sources of Income
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Keep Track of Expenses
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Keep Track of the Basis of Property
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Prepare Tax Returns
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Support Items Reported on Tax Returns
Records You Should Keep
Basic Records
Basic records are the documents that everybody should keep.
These are the records that prove your income and expenses.
Basic records should contain documents related to these items:
Proof of Income and Expense
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Income – Form(s) W-2, 1099, K-1, Bank statements, Brokerage
statements
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Business income – Cash register tapes, bank deposit slips,
receipt books, invoices, credit card charge slips, form(s)
1099-MISC
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Expenses – Sales slips, Invoices, receipts, cancelled checks
or other proof of payment
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Home – Closing statements, purchase and sales invoices,
proof of payment, insurance records
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Investments – Brokerage statements, mutual fund statements,
Form(s) 1099, 2439
Proof of Payment
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Cash – Amount, payee’s name, transaction date
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Check – Check number, amount, payee’s name, date the check
amount was posted to the account by the financial
institution
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Debit or credit card – Amount charged, payee’s name,
transaction date
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Electronic funds transfer – Amount transferred, payee’s
name, Date transfer posted to the account by the financial
institution
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Payroll deduction – Amount, payee code, transaction date
Specific Records
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Alimony
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Business use of your home
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Casualty and Theft Losses
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Child care credit
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Contributions
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Credit for the elderly or the disabled
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Education expenses
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Exemptions
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Employee business expenses
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Gambling winnings and losses
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Health savings account and medical savings account
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Individual retirement arrangements (IRAs)
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Medical and dental expenses
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Mortgage interest
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Moving expenses
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Pensions and annuities
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Taxes
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Tips
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