GOOD RECORDS CAN PAY DIVIDENDS AT TAX TIME
Taxpayers can save time and money by keeping track throughout the year of the information they will need when filing their tax return.
Although it takes time to set up
a record-keeping system, it can save time in the long run especially when
taxpayers have waited to the last minute to file. Not only will it save time,
but a thorough search through a check register, receipts, credit-card statements
and other documents can save money by ensuring that you pay the lowest possible
amount of tax.
The following checklist includes
some of the most common items taxpayers need to substantiate income, deductions
1. Statements of all income received during the year: W-2s; unemployment compensation; income from jury duty, hobbies, casual labor: the sale of stock or other property.
Money received from rents, royalties, alimony, pensions, prizes and tips.
Interest earned on savings accounts and other investments.
4. Dividends received from mutual funds and corporate securities.
Records of items eligible for deductions:
insurance premiums and other medical and dental expenses
paid on your home mortgage
to an IRA or Keogh plan
estate and personal property taxes
expenses incurred to improve your job skills
Amounts paid for childcare while the taxpayer works or goes to school,
plus the name, address and tax identification
number of the child-care provider.
Job-related moving expenses.
8. Education expenses and statements for student loan interest.
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