Tips on Record Keeping for Tax Planning
An essential part of tax planning is record keeping so you have everything you need to present to your Certified Public Accountant (CPA) when tax season comes around. But how do you know what records are important to keep? Here are some tips on ensuring you are well-prepared for tax planning.
Records to Keep for Tax Planning
First and foremost, it’s important to keep all records organized. Using software programs for electronic record keeping or creating actual folders will help keep all tax documents together in one place.
- Tax documents: These include wage statements from your employers, interest statements from banks, and any government payments, such as unemployment compensation.
- IRS letters and notices: Such letters and notices from the IRS may include Economic Impact Payment notices and adjustment notices when an action is taken on your account.
- Property records: It’s important to keep records relating to your property, especially if you sold your home in that tax year.
- Business income and expenses: If you are a business owner, keep all records that accurately reflect your gross income and expenses. This includes receipts, invoices, checks, bank statements, and other paperwork that supports earnings and deductions. If you use your vehicle for business, keep a detailed log of your mileage with dates and purpose of destinations.
- Health insurance: Keeping records of you and your family’s health insurance coverage will help if you claim the premium tax credit. Your CPA will need information about credit payments received through the Health Insurance Marketplace and the premiums that they paid.
Consult With a Tax Professional
A CPA can provide personalized advice based on your specific tax planning needs to ensure that you’re maximizing deductions while complying with tax laws. JTS Associates CPAs is here to help. Contact us at (516) 877-5900.
