Good recordkeeping reduces errors and supports eligibility for tax credits and deductions
The New York State Department of Taxation and Finance today encouraged taxpayers to begin gathering and organizing their 2016 financial records in preparation of tax season. Receiving any tax credit or deduction hinges on the ability of taxpayers to prove their earned income and expenses claimed on their income tax return.
“With less than one week left in 2016, taxpayers can simplify the filing season by compiling their financial documents now,” said Acting Commissioner of Taxation and Finance Nonie Manion. “With the proper documentation taxpayers are more likely to be able to successfully claim potentially valuable credits and deductions.”
Records to collect
- Gather documents, including bank statements, deposit slips, canceled checks, and invoices.
- Business owners—including the self-employed—must compile records of each sale, including the sales price, the sales tax collected, cash register receipts, and credit card sales slips.
- Records for the self-employed should contain enough information to accurately show the tax year’s gross receipts, business expenses, and the purchase price of assets and inventory.
- Tax records should be maintained for at least three years as it could impact a taxpayer’s ability to prove eligibility for valuable credits such as the Earned Income Tax Credit (EITC).
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