What Records Should I Keep to Support My Tax Return?

Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.

How Long Should I Keep My Tax Records?

It is important to keep these documents because they support the entries in your books and on your tax return.

Gross receipts – Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents that show gross receipts include the following.

  • Cash register tapes.
  • Bank deposit slips.
  • Receipt books.
  • Invoices.
  • Credit card charge slips.
  • Forms 1099-MISC.

Inventory – Inventory is any item you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the amount was for inventory. Documents reporting the cost of inventory include the following.

  • Canceled checks.
  • Cash register tape receipts.
  • Credit card sales slips.
  • Invoices.

Expenses – Expenses are the costs you incur (other than the cost of inventory) to carry on your business. Your supporting documents should show the amount paid and that the amount was for a business expense. Documents for expenses include the following.

  • Canceled checks.
  • Cash register tapes.
  • Account statements.
  • Credit card sales slips.

About the author: Steve Mangione