Tax Tip: Gather Records Early For Smooth Tax Return Preparation

A paper chase is often the kickoff event in tax season. The Internal Revenue Service advises taxpayers to keep records that document any deductions or credits to be claimed. Invoices, credit card statements, receipts, cancelled checks and mileage logs can be crucial to proving deductions or credits. A well-organized set of documents also speeds return preparation. Although the IRS doesn't require that the records be kept in any particular way, they must be available. Most documents must be kept for three years, but some must be kept for longer periods of time. Documents from the sale or purchase of a home are among those that taxpayers need to keep beyond the customary three years. Those documents are even more important for those planning to claim the homebuyer tax credit this year. The IRS has put new rules in place for those who want to enjoy that tax benefit. There's more information at www.irs.gov