La Quinta, CA
(760) 895-3516

Thursday, April 30, 2015

Keeping Records In Case of Audits

Keeping Records for IRS Tax Purposes

It is the taxpayer’s responsibility to keep adequate financial records for proving income and expenses incurred during the tax year.
  • W-2's
  • 1098's
  • 1099's
  • Bank Statements
  • Brokerage Statements
  • K-1's
  • 1099-DIV's
  • 1099-INT's
  • Sales slips
  • Invoices
  • Receipts
  • Canceled checks/proof of payment
  • Proof of donations/written receipts
  • Closing records/statements
  • Purchase and sales invoices
  • Proof of payment
  • Insurance records
  • Receipts for any improvements done
  • Brokerage statements
  • Mutual fund statements
  • 1099's
  • 2439's
  • Receipts for collectibles

For income, you will need to have basic receipts that prove your reported amount of income on your tax return. Included will be wages, tips, dividends, interest, taxable refunds of state and local taxes, alimony received, business income or losses, capital gains or losses, taxable IRA distributions, taxable pensions and annuities,rental income, royalty income, partnership or S corporation distributions, farm income or losses, unemployment income, taxable social security benefits, and other income such as foreign income, jury duty income, HSA distributions, long term care payments, distributions from estates and trusts, K-1 income, personal rental property (not real estate), gambling winnings, income reported to you on a 1099-MISC, Alaska permanent fund, debt cancelation, and prizes or awards of value won/gifted in the year.
For expenses, you will need to prove exactly how much was spent. The IRS will not consider bank statements or credit card statements as written proof of expenses. You will need receipts.
Borders Bookkeeping
(760) 895-3516