If you prefer to keep it old school, you still need to follow some guidelines when saving your records. Should you ever get audited, you could find yourself struggling to provide evidence for your deductions. If you only keep paper receipts in a filing cabinet, then you risk losing them at some point. Since the IRS encourages you to keep records for so long, online storage becomes even more crucial. The IRS advises you to keep tax documents for seven years when filing loss from worthless securities or bad debt. In fact, it is recommended that you keep your tax and return documents and receipts for up to three years.
Countless cloud-based storage programs exist, so you can keep track of your tax documents for years to come. Not only can you digitize paper documents, but you can store your receipts online. Thanks to today’s technology, organizing your receipts and records is easier than ever. Whether they are paper or digital, you can follow our dos and don’ts to make filing your taxes easier next tax year!
To ensure that never happens to you again, we’ve created this article as a guide for saving your receipts for your taxes. As a result, you miss out on hundreds if not thousands of dollars in tax savings.Ĭountless small businesses and individuals miss out on valuable deductions when filing their state and federal income tax returns. Though you mean well and plan to organize your receipts for taxes, they often get lost. All year, you get countless receipts that you stuff into a shoebox. If you are self-employed or own a small business, you know how easy it is to lose track of expenses around tax time.