We all know that taxes are never fun. Now that tax season is behind us, how do you make this next tax season more tolerable? Here are some valuable tax record-keeping tips that will make tax preparation a breeze.
- Don’t Toss Your Tax Information!
Remember that tax returns are amendable and auditable for 3 years. Keep any tax information, including your tax returns copies, for at least 3 years. However, if your reported income was 25% less or more than your actual income, the IRS has 6 years to send you an audit request.
- Organization Does Help
Have a central location for all your tax-related documents. Make a habit out of filing everything immediately, and keep active files easily accessible. Why not keep digital copies and scan documents to your computer as a safeguard and to save space? Use the shredder for unneeded documents that contain personal info.
- Check Out a Finance App
Don’t like constantly keeping tabs of your finances? Fortunately, there is a whole slew of personal finance apps out there to help you do so these days. From Mint, which keeps all your accounts details in one centralized place, to Wally, which tracks your spending from receipts, to Acorn, which invests your spare change in low-cost ETFs, mobile apps can help you stay ahead of the game.
- Keep Track of Investments and Charity Receipts
Keep in mind that if you exceed the amount of investment losses from prior years, you can deduct it as a capital loss from an investment. You may be able to continually deduct that loss in the future years until the full amount is deducted. Similarly, if you attended a charity event such as a dinner, you can deduct the amount you paid for your ticket minus the worth of what you received.
- Log Your Business Mileage
If you ever have to use your car for business-related travel (outside of day-to-day commuting), be sure to keep track of it! The 2015 standard mileage rate for business use of vehicles allows for drivers to deduct 57.5 cents per mile of business-related travel!
- When in Doubt, Ask Us!
Not sure about something? Community Tax is always here to help! Give us a call – (773) 577-2020
Use these tips to keep your finances in order through the rest of 2016!