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The Benefits of Keeping Good Records (how to save yourself time and frustration)

The dreaded tax season is coming up. But it doesn't have to be a huge stress if you think ahead a little at a time.

a pile of papers are stuffed into two binders. get organized!

4 Benefits of Keeping your Records Neat

  • Identify sources of income. You may receive money or property from a variety of sources. By keeping track of your records you can identify the sources of income and help separate business from non-business income and taxable from nontaxable income.

  • Keep track of expenses. You may use records to identify expenses. Identifying expenses is important because those expenses may qualify as tax deductions or credits (thus lowering your tax bill). It will also help determine whether to itemize deductions at filing.

  • Prepare tax returns. Good records will help you file your tax return quickly and accurately. Throughout the year, you should add your tax records to your files as soon as you receive them to make preparing a tax return easier.

  • Support items reported on tax returns. Well-organized records make it easier to prepare a tax return and help provide answe