Tax filing season is only a few weeks away, and the Internal Revenue Service encourages taxpayers to take the time beforehand to gather and organize their tax records to reduce stress.
“You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year,” said IRS spokesman Clay Sanford.  “Good recordkeeping during the year saves time and effort when completing your tax return.”
Generally, the IRS does not require you to keep records in any special manner.  You should, however, keep any and all documents that may have had an impact on your federal tax return.  Such items would include bills, receipts, invoices, mileage logs, canceled checks, or any other proof of payment.  “Taxpayers may normally select any recordkeeping structure that is appropriate to their business that clearly shows income and expenses,” Sanford noted.
If you hire a paid professional to complete your return, the records you have kept will assist the preparer to complete your return quickly and accurately.
Tax records should usually be kept for three years, but some documents—for example, records relating to a home purchase or sale, stock transactions, Individual Retirement Accounts, and business or rental property—should be kept longer.
Sanford added that recordkeeping habits can have a positive impact on your business as well.  “You need records to watch the development of your business. Records can show whether your business is improving, which items are selling, or what changes you need to make.  Keeping thorough, accurate records can only increase the chances of business success.”
For more information on what types of records to keep, see IRS publication 552, Recordkeeping for Individuals.  It’s available at  Most federal tax forms and publications can be downloaded from the IRS Web site or ordered by calling 1-800-TAX-FORM. Telephone tax assistance from the IRS is available at 1-800-829-1040.