Got questions? Find Answers.

  • What pieces of paper do I need to keep in order to do my taxes?

    Keep detailed records of your income, expenses, and other information you report on your tax return. A good set of records can help you save money when you do your taxes and will be your trusted ally in case you are audited.

    There are several types of records that you should keep. Most experts believe it’s wise to keep most types of records for at least seven years, and some you should keep indefinitely.

  • What type of records do I need to keep?

    Keep records of all your current year income and deductible expenses. These are the records that an auditor will ask for if the IRS selects you for an audit.

    Here’s a list of the kinds of tax records and receipts to keep that relate to your current year income and deductions:

    • Income (wages, interest/dividends, etc.)
    • Exemptions (cost of support)
    • Medical expenses
    • Taxes
    • Interest
    • Charitable contributions
    • Child care
    • Business expenses
    • Professional and union dues
    • Uniforms and job supplies
    • Education, if it is deductible for income taxes
    • Automobile, if you use your automobile for deductible activities, such as business or charity
    • Travel, if you travel for business and are able to deduct the costs on your tax return
  • How long should I keep these records?

    Keep the records of your current year’s income and expenses for as long as you may be called upon to prove the income or deduction if you’re audited. For federal tax purposes, this is generally three years from the date you file your return.

    Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

  • What kind of records do I need to keep in my business?

    Complete and accurate financial record keeping is crucial to your business success. Good records provide the financial data that help you operate more efficiently. Accurate and complete records enable you to identify all your business assets, liabilities, income and expenses. That information helps you pinpoint both the strong and weak phases of your business operations.

    Moreover, good records are essential for the preparation of current financial statements, such as the income statement (profit and loss) and cash-flow projection. These statements, in turn, are critical for maintaining good relations with your banker. Finally, good records help you avoid underpaying or overpaying your taxes. In addition, good records are essential during an Internal Revenue Service audit, if you hope to answer questions accurately and to the satisfaction of the IRS.

  • How can I tell whether I have too much debt?

    If you answer yes to any one of the following questions, you should take action:

    • Have you run several credit cards up to the limit?
    • Do you frequently make only the minimum monthly payments?
    • Do you apply for almost any credit card you are offered–without checking out the terms?
    • Have you used the cash advance feature from one card to pay the minimum payment on another?
    • Do you use cash advances (or a credit card) for living expenses such as food, rent, or utilities?
    • Are you unable to say what your total debt is?
    • Are you unable to say how long it would take you to pay off all your current debts (excluding mortgages and cars) at the rate you have been paying?

    If you find several of these statements describe your credit habits, it may be that you need to take steps to manage your debt before bill collectors start calling and your credit history is endangered.

  • What factors affect my credit rating?

    Your credit rating is affected by a number of different factors, some obvious and others few consumers are aware of. The following factors are discussed below:

    • Whether you have a credit card or use another person’s credit card
    • Whether you have a bank checking or savings account
    • Where you live
    • Your age
    • Your debt-income ratio
    • Whether you have declared bankruptcy or have had “charge-offs” to your account
    • Whether you are delinquent in any child support payments
    • Whether you have “too much” credit available
  • What do banks look for when considering a loan request?

    When reviewing a loan request, the bank official is primarily concerned about repayment. To help determine this ability, many loan officers will order a copy of your business credit report from a credit-reporting agency.

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