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.

 

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  1. 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.

  1. 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.

 

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  1. 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.

  1. 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.

 

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  1. 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!

  1. 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!

 

0 thoughts on “6 Record-Keeping Tricks Halfway Through 2016

  1. \i like that you pointed out that it is very important to keep track of investment and charity receipts. Those are things that I wouldn’t think about keeping. However, they do seem like they would be helpful to have during tax season. It does seem like a good idea to have a professional to help you when it comes to keeping track of those things.

  2. My wife and I want to get a headstart on the tax season and have been looking online for tips. I like that you suggest keeping track of investment losses from prior years that you can deduct from this year. We don’t have any from this year or last but we might have to try this sometime. Thanks for sharing!

  3. Some of what is told about here, about the Federal United States Self-Employment tax’s terms, has changed as of 2012:

    1. SE tax is now 13.3 %, 2 % lower than before. 15.3 % was the rate for at least the last decade, but it is now lowered.

    2. You can deduct more than half (see the 1040SE form for details) of your self-employment taxes, from your taxable income… provided your taxable income or your self-employment income is below a certain level. (See tax forms, either the 1040 instructions or the 1040SE form, for details.)

    I have not yet found out who is responsible for these rather merciful changes, but I would like to know.

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