Records that should be kept: Records of income received Expense items, especially work-related expenses Home improvements, sales, and refinances Investment purchases and sales information The estate value of inherited property Specific uses of loan proceeds Medical expenses Charitable contributions Interest and taxes paid Records on nondeductible IRA contributions By keeping your records organized it will eliminate the extra cost an accountant would charge for organizing your receipts.

HOW LONG SHOULD RECORDS BE KEPT? Federal returns can be audited for up to three years after filing (six years if underreported income is involved), so all records substantiating tax deductions should be kept at least that long. Here are the recommended retention periods for various records: Cancelled checks - 7 years Credit card receipts - 7 years Paid invoices - 7 years Bank deposit slips - 7 years Bank statements - 7 years Tax returns (uncomplicated ) - 7 years Tax returns (all others) - Permanent Employment tax returns - 7 years Expense records - 7 years Financial statements - Permanent Contracts - Permanent Minutes of meetings - Life of company plus 7 years Corporate tax records - Permanent Employee records - Period of employment plus 7 years Depreciation schedules - Life of assets plus 7 years Real estate records - Ownership period plus 7 years Journal and general ledger - Life of business plus 7 years Inventory records - 7 years Home purhcase and improvement records - Ownership period plus 7 years Investment records - Ownership period plus 7 years.