In January, you expect to get in your mailbox most of the papers you need to document income, interest and withheld taxes that you have to report. Investment-related 1099s often come in February. Some W-2s come via the postal service, while others are announced via email, telling you that documents are available online and may be landing in your inbox soon.
Important 1099s from banks and such other financial institutions as mortgage providers are often posted to your online account. You may want to create an email tax folder for messages relating to tax information.
It's a good idea to track paperless records as they come. After all, online statements often contain key backup records for such potential deductions as charitable donations, health care outlays, and gambling winnings and losses, as well as property tax expenditures and tax credits for electric and electric-drive motor vehicles.
Take a few extra minutes each month to jot down tax-related information from line items on statements, such as expense title, check numbers, payee names, dollar amounts and the dates incurred. If you create a spreadsheet dedicated to tax records, you'll snag online documents and information that will be available for only a limited time.
What other deductions can you track throughout the year?
Keep your filing history because your tax returns are needed — for mortgages, applying for student loans and checking the status of your refund. Generally, you'll need to save tax returns for three years after the filing date in case of an audit. In fact, the IRS can audit you for as many years back as they want if the agency suspects fraud, so keeping tax returns and supporting documents for at least seven to 10 years is a good rule of thumb.
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