MONEY AND FINANCE

Keeping Tax Records

Keeping Tax Records
Every year you and I go through the same thing. At the beginning of the year we start gathering up everything we need in order to file our federal income tax return. Once that task is accomplished and we have filed our returns, we file this year’s return with the returns of years past. We call this keeping tax records.

Something to keep in mind in regards to your prior returns, even though your records are no longer needed for tax purposes, you don’t want to trash them yet. Check and see if you need to continue retaining them for other purposes. For instance, your insurance company or even your creditors might require that you keep them for a period of time longer than the IRS does.

With that in mind, there are a number of other reasons for keeping tax records. Tax records help tax payers keep track of all income sources, keep track of deductible expenses and they can even aid in preparing future returns. Truth is, what you claimed this year may be pertinent to next year. Maybe even in ensuing years.

Things like losses have a cap on their deductibility. This means if you have serious losses you won’t be able to claim all of them in one year. You will have to push them forward. There is one resource that can help you keep accurate records and make better tax decisions. It is called 1040 Gold Mine.

This book actually takes an IRS Form 1040 and analyzes its parts. It is these parts that can serve as your blueprint to your personal financial management plan. The FORM 1040 is actually your personal financial snapshot for the previous year. You can use it to manage your finances for the upcoming year.

There is no better free way to put a handle on your income and expenses because the 1040 is designed with these two groups in mind. Keeping tax records isn’t likely to go away anytime soon so why not use the one tool we all must file as our money management guide.


Go Home…