RECORD KEEPING

Request a Transcript or Copy of a Prior Year Tax Return

You may need copies of your filed tax returns for many reasons.  For example, they can help you prepare future tax returns. You’ll need them if you have to amend a prior year tax return.  You often need them when you apply for a loan to buy a home or to start a business.  You may need them if you apply for student aid.  If you can’t find your copies, the IRS can give you a transcript of the information you need, or a copy of your tax return.  Here’s how to get your federal tax return information from the IRS:

  • Transcripts are free and you can get them for the current year and the past three years.  In most cases, a transcript includes the tax information you need.

  • A tax return transcript shows most line items from the tax return that you filed.  It also includes items from any accompanying forms and schedules that you filed.  It doesn't reflect any changes you or the IRS made after you filed your original return.

  • A tax account transcript includes your marital status, the type of return you filed, your adjusted gross income and taxable income. It does include any changes that you or the IRS made to your tax return after you filed it.

  • You can get your free transcripts immediately online.  You can also get them by phone, by mail or by fax within five to 10 days from the time IRS receives your request.

- To view and print your transcripts online, go to IRS.gov and use the Get Transcript tool.
- To order by phone, call 800-908-9946 and follow the prompts. You can also request your transcript using your        smartphone with the IRS2Go mobile phone app.
- To request an individual tax return transcript by mail or fax, complete Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a tax account transcript should use Form 4506-T, Request for Transcript of Tax Return.

  • If you need a copy of your filed and processed tax return, it will cost $50 for each tax year, so it's a good idea to keep your onw copy of your return in a safe place.  You should complete Form 4506, Request for Copy of Tax Return, to make the request.  Mail it to the IRS address listed on the form for your area.  Copies are generally available for the current year and past six years.  You should allow 75 days for delivery. 

  • If you live in a federally declared disaster area, you can get a free copy of your tax return.  Visit IRS.gov for more disaster relief information.

Give Withholding and Payments a Check-up to Avoid a Tax Surprise

Some people are surprised to learn they’re due a large federal income tax refund when they file their taxes. Others are surprised that they owe more taxes than they expected. When this happens, it’s a good idea to check your federal tax withholding or payments.  Doing so now can help avoid a tax surprise when you file your tax return next year.

Here are some tips to help you bring the tax you pay during the year closer to what you’ll actually owe.

Wages and Income Tax Withholding

  • New Job.   Your employer will ask you to complete a Form W-4, Employee's Withholding Allowance Certificate. Complete it accurately to figure the amount of federal income tax to withhold from your paychecks.

  • Life Event.  Change your Form W-4 when certain life events take place.  A change in marital status, birth of a child, getting or losing a job, or purchasing a home, for example, can all change the amount of taxes you owe.  You can typically submit a new Form W–4 anytime.

  • IRS Withholding Calculator.  This handy online tool will help you figure the correct amount of tax to withhold based on your situation.  If a change is necessary, the tool will help you complete a new Form W-4.

Self-Employment and Other Income

  • Estimated tax.  This is how you pay tax on income that’s not subject to withholding.  Examples include income from self-employment, interest, dividends, alimony, rent and gains from the sale of assets.  You also may need to pay estimated tax if the amount of income tax withheld from your wages, pension or other income is not enough.  If you expect to owe a thousand dollars or more in taxes and meet other conditions, you may need to make estimated tax payments.

  • Form 1040-ES.  Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to find out if you need to pay estimated taxes on a quarterly basis.

  • Change in Estimated Tax.  After you make an estimated tax payment, some life events or financial changes may affect your future payments.  Changes in your income, adjustments, deductions, credits or exemptions may make it necessary for you to re-figure your estimated tax.

  • Additional Medicare Tax.  A new Additional Medicare Tax went into effect on Jan. 1, 2013.  The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income that exceeds a threshold amount based on the individual’s filing status.  

  • Net Investment Income Tax.  A new Net Investment Income Tax went into effect on Jan. 1, 2013.  The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. 

Give Tax Records a Mid-Year Tune-up this Summer

During the summer, you may not think about doing your taxes, but maybe you should.  Some of the expenses you’ve paid over the past few months might qualify for money-saving tax credits or deductions come tax time.  If you organize your tax records now, you’ll make tax filing easier and faster when you do them next year.  It also helps reduce the chance that you’ll lose a receipt or statement that you need.

Here are some tips from the IRS on tax record keeping.

  • You should keep copies of your filed tax returns as part of your tax records.  They can help you prepare future tax returns. You’ll also need them if you need to file an amended return.
 
You must keep records to support items reported on your tax return.  You should keep basic records that relate to your federal tax return for at least three years.  Basic records are documents that prove your income and expenses.  This includes income information such as Forms W-2 and 1099.  It also includes information that supports tax credits or deductions you claimed.  This might include sales slips, credit card receipts and other proofs of payment, invoices, cancelled checks, bank statements and mileage logs.

  • If you own a home or investment property, you should keep records of your purchases and other records related to those items.  You should typically keep these records, including home improvements, at least three years after you have sold or disposed of the property. 

  • If you own a business, you should keep records that show total receipts, proof of purchases of business expenses and assets.  These may include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices.  Also include credit card receipts, sales slips, canceled checks, account statements and petty cash slips.  Electronic records can include databases, saved files, emails, instant messages, faxes and voice messages.

  • If you own a business with employees, you should generally keep all employment-related tax records for at least four years after the tax is due, or after the tax is paid, whichever is later.

  • The IRS doesn’t require any special method to keep records, but it’s a good idea to keep them organized and in one place. This will make it easier for you to prepare and file a complete and accurate return.  You’ll also be better able to respond if there are questions about your tax return after you file.

Missing Your W-2?  Here’s What to Do

It’s a good idea to have all your tax documents together before preparing your 2012 tax return.  You will need your W-2, Wage and Tax Statement, which employers should send by the end of January.  Give it two weeks to arrive by mail.

If you have not received your W-2, follow these three steps:

1. Contact your employer first.  Ask your employer – or former employer – to send your W-2 if it has not already been sent. Make sure your employer has your correct address.

2. Contact the IRS. After February 14, you may call the IRS at 800-829-1040 if you have not yet received your W-2. Be prepared to provide your name, address, Social Security number and phone number. You should also have the following information when you call:

  • Your employer’s name, address and phone number;

  • Your employment dates; and

  • An estimate of your wages and federal income tax withheld, based upon your final pay stub or leave-and-earnings statement, if available.

3. File your return on time. You should still file your tax return on or before April 15, even if you have not yet received your W-2.  File Form 4852, Substitute for Form W-2, Wage and Tax Statement, in place of the W-2.  Use the form to estimate your income and withholding taxes as accurately as possible. The IRS may delay processing your return while it verifies your information.

If you need more time to file you can get a six-month extension of time.  File Form 4868, Application for Automatic Extension of Time to File US Individual Income Tax Return.  If you are requesting an extension, you must file this form on or before April 15.

If you receive the missing W-2 after filing your tax return and the information on the W-2 is different from what you reported using Form 4852, then you must correct your tax return.  File Form 1040X, Amended U.S. Individual Income Tax Return to amend your tax return.e to edit.

Start Planning Now for Next Year's Tax Return

The tax deadline may have passed but planning for next year can start now.  Being organized and planning ahead can save time, money and headaches in 2013.  Here are eight things you can do now to make next April 15 easier.

  • 1.  Adjust your withholding  Why wait another year for a big refund?  Now is a good time to review your withholding and make adjustments for next year, especially if you’d prefer more money in each paycheck this year.  If you owed at tax time, perhaps you’d like next year’s tax payment to be smaller.  Use IRS’s Withholding Calculator at IRS.gov or Publication 919, How Do I Adjust My Tax Withholding?

  • 2.  Store your return in a safe place  Put your 2011 tax return and supporting documents somewhere secure so you’ll know exactly where to find them if you receive an IRS notice and need to refer to your return.  If it is easy to find, you can also use it as a helpful guide for next year’s return.

  • 3.  Organize your record keeping  Establish a central location where everyone in your household can put tax-related records all year long.  Anything from a shoe-box to a file cabinet works.  Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time.

  • 4.  Review your paycheck  Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items.  These payroll adjustments can make a big difference on your bottom line.  Fixing an error in your paycheck now gets you back on track before it becomes a huge hassle.

  • 5.  Prepare to itemize deductions  If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off.  An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings.  See the Schedule A instructions for expenses you can deduct if you’re itemizing and then prepare an approach that works best for you.

  • 6.  Strategically plan tuition payments  The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012.  It may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, before it expires.  For more information, see IRS Publication 970, Tax Benefits for Education.

Each household’s financial circumstances are different so it’s important to fully consider your specific situation and goals before making large financial decisions.

Organizing Tax Records This Summer Can Help You Keep Your Cool

If the sweltering dog days of summer aren’t incentive enough to get out of the sun for awhile, the IRS suggests another reason to head indoors:  organizing your tax records.  Devoting some time mid-year to putting your tax-related documents in order may not only keep you out of the sun, but it should also make it easier for you to prepare your tax return when the filing season arrives.

Here are some things the IRS wants individuals and small business owners to know about record keeping.

  • What to keep – Individuals.  In most cases, keep records that support items on your tax return for at least three years after that tax return has been filed.  Examples include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks or other proof of payment and any other records to support deductions or credits claimed. You should typically keep records relating to property at least three years after you've sold or otherwise disposed of the property.  Examples include a home purchase or improvement, stocks and other investments, Individual Retirement Account transactions and rental property records.
  • What to keep – Small Business Owners.  Typically, keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later.  Also, keep records documenting gross receipts, proof of purchases, expenses and assets. Examples include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices, credit card charges and sales slips, Forms 1099-MISC, canceled checks, account statements, petty cash slips and real estate closing statements.  Electronic records can include databases, saved files, e-mails, instant messages, faxes and voice messages.
  • How to keep them - Although the IRS generally does not require you to keep your records in any special manner, having a designated place for tax documents and receipts is a good idea.  It will make preparing your return easier, and it may also remind you of relevant transactions. Good record keeping will also help you prepare a response if you receive an IRS notice or need to substantiate items on your return if you are selected for an audit.
For more information on record keeping for individuals, check out Chapter 1, “Filing Information,“ in IRS Publication 17, Your Federal Income Tax.  Find small business record keeping information in IRS Publication 583, Starting a Business and Keeping Records.  Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).  Also available are new video and audio files explaining record keeping requirements in detail, located on our IRS video portal at IRSvideos.gov.

IRS Offers Tips for Safeguarding Tax Records

Hurricane season has started and the IRS encourages individuals and businesses to safeguard their tax records against natural disasters by taking a few simple steps.

Here are four tips from the IRS to help you prepare in case a disaster strikes.

1.  Backup records electronically  Taxpayers should keep a set of backup records in a safe place away from the original set. Keeping a backup set of records, bank statements, tax returns, insurance policies, etc is easier now that many financial institutions provide statements and documents electronically.  Even if the original record is only available on paper, it can be scanned into an electronic format.  With documents in electronic form, taxpayers can download them to a portable backup storage device such as an external hard drive, CD or DVD that you can take with you in the event that you need to evacuate.

2.  Document valuables  Taxpayers should photograph or videotape the contents of their home, especially items of higher value.  A photographic record can help an individual prove the market value of items for insurance and casualty loss claims.  Photos should be stored at an outside location.

To document your valuables, the IRS has a disaster loss workbook, Publication 584, Casualty, Disaster and Theft Loss Workbook, which can help taxpayers compile a room-by-room list of belongings.

3.  Update Emergency Plans  Emergency plans should be reviewed at least once a year.  Personal and business situations change over time as do preparedness needs.  When employers hire new employees or when a company changes functions, plans should be updated and employees should be informed.

4.  IRS Ready to Help  If a disaster strikes, affected taxpayers can call 1-866-562-5227 to speak with IRS specialists trained to handle disaster-related issues.

Managing Your Tax Records After You Have Filed

Keeping good records after you file your taxes is a good idea, as they will help you with documentation and substantiation if the IRS selects your return for an audit. Here are five tips from the IRS about keeping good records.

1.  Normally, tax records should be kept for three years.

2.  Some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

3.  In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.

4.  Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.

5.  For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on the IRS website at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Keep Good Records Now to Reduce Tax-Time Stress

You may not be thinking about your tax return right now, but summer is a great time to start planning for next year. Organized records not only make preparing your return easier, but may also remind you of relevant transactions, help you prepare a response if you receive an IRS notice, or substantiate items on your return if you are selected for an audit.

Here are a few things the IRS wants you to know about record keeping.

1. In most cases, the IRS does not require you to keep records in any special manner. Generally, you should keep any and all documents that may have an impact on your federal tax return. It’s a good idea to have a designated place for tax documents and receipts.

2. Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:

  • Bills
  • Credit card and other receipts
  • Invoices
  • Mileage logs
  • Canceled, imaged or substitute checks or any other proof of payment
  • Any other records to support deductions or credits you claim on your return
You should normally keep records relating to property until at least three years after you sell or otherwise dispose of the property. Examples include:

  • A home purchase or improvement
  • Stocks and other investments
  • Individual Retirement Arrangement transactions
  • Rental property records
3. If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:

  • Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
  • Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
  • Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
  • Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks
For more information about record keeping, check out IRS Publication 552, Record keeping for Individuals, Publication 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).