As April 15th gets closer, you should know what documents and receipts you should keep for tax purposes as certain ones are critical. If you have them handy when the time comes, you’ll spend a lot less time scrambling and have a much easier time fulfilling your requirements to the IRS.
Once you file your return, if you discover you owe some cash to the IRS and can’t pay it all at once, you might need to look into tools like a debt payoff calculator so you can arrange payments as expediently as possible. If the IRS owes you a refund, on the other hand, you may choose to pay off any remaining debt with that money.
Whether you expect to owe money or there’s a refund coming your way, we’ll cover a few of the more vital receipts and documents you’ll want to keep for filing taxes in the following article.
1. Business Owner Receipts
If you own a business, there are particular documents you’ll need to keep for tax purposes that the IRS will want to see. Those will include any canceled checks, deposit slips, invoices, receipts, sales slips, or paid bills having to do with your business venture.
You should also be sure to keep what the business world calls gross receipts. Those will include receipt books, deposit information, cash register tape, and any IRS Forms 1099-MISC.
2. Business Expense Receipts
If you run a business, you should also keep track of any expenses that directly pertain to it. In many instances, you can use the receipts as deductions when tax time comes.
These documents can include petty cash slips, invoices, canceled checks, cash register tapes, credit card statements and receipts, and account statements. You can also keep any documentation having to do with business gifts, travel expenses, or eligible transportation.
3. Non-Business Owners
If you don’t own a business, you will have to keep a slightly different set of receipts and other documents for tax purposes. Those will include things like student loan interest receipts and receipts for childcare expenses.
If applicable, you should also keep any energy-saving home improvement receipts, as well as any documents that will prove the cost basis for a gift or inherited property.
If you have any household employees, keep receipts for the payments you make to them. Receipts for medical expenses and dental costs are something you should retain as well. Finally, keep the receipts from any contributions you made to a traditional individual retirement account, such as a 401K.
Keeping Track of Financial Receipts and Documentation Matters
If you’re careless about what receipts and other financial documents you keep and which ones you discard, it will complicate matters at tax time. Remember that if you own your own business, you will keep different documents than you would if you work for a company as a contracted employee.
If you own a business, you’ll keep things like sales slips, invoices, canceled checks, and deposit slips as well as gross receipts, including things like cash register tape and receipt books.
If you work for a company as a contracted employee, the receipts and documents you keep for tax filing will be rather different. You’ll want to keep track of contributions you made to your retirement accounts, energy-saving home improvement receipts, and student loan interest receipts, among others.
If you need an extensive list of what to keep if you’re a business owner or otherwise, you can always stop by the IRS website or speak to a tax professional.
