One of the most common requests that I hear are what types of financial records should I keep and what should I bring to the Certified Public Accountant to prepare my income taxes.
A good filing system is essential to locate personal financial records. If you start off with a basic accordian file for "home", "end of year taxes", "retirement plans", etc. it makes it easy to find these records at a moments notice. If they are in a pile of mail that you haven't sorted in six months, it does make it more challanging to find important information.
Basic Records:
- W-2's
- 1099 - Miscellaneous Income
- K-1 - Income from various types of businesses
- Bank Statements
- Brokerage Statements/ Mutual Fund Statements
- Sales Slips, Invoices and Receipts
- Cancelled checks or other proof of payment
Home Expenses:
- Closing Statements
- Proof of Payment
- Insurance Records
- Form 2119
- Home Improvement Records and their costs (Remember this may affect your taxes, if you later sell your home.)
Retirement Plan Information
- Agreement to Open Plan
- List of Beneficiaries
- 401(k) plan information
- Statements
And of course, keep copies of your tax returns!!!!
IRS CIRCULAR 230 NOTICE:
Any U.S. tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.
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