It’s Time To COPE Your Tax Records

It’s Time To COPE Your Tax Records

The upcoming tax season is rapidly approaching. Despite the shifts in Washington D.C. (and possible updates to the Internal Revenue Code), managing your tax records throughout the year is a best practice. Consider the below action-items as you deal effectively with your tax records:

  • COLLECT. Be familiar with the events in your life that elevate your tax obligations. Know who your payors (and payees) are and assess sooner than later their reputation of providing timely information. Typically, individuals receive their annual information returns via their employer’s intranet or mail. However, we recommend that you establish in-house tracking and record retention processes for your income and expense transactions.
  • ORGANIZE. One of your objectives with bookkeeping is clarity as you work with your tax information. The naming or filing system you use should allow you to easily retrieve information requested by your regulatory agencies. Being organized is helpful to reducing stress during the income tax return filing season.
  • PRESERVE. Be aware of the statute of limitations set by your regulatory agencies for tax and tax-related documents. Due to technological advances, documents can be put into electronic formats. Also, a paper trail has it place in your tax plan and can serve as reliable source documents. If you choose this method of document preservation, make sure the information is protected – fireproof, waterproof, ink proof and theft proof. Secure your information whether it is in an electronic or a paper format.
  • EVALUATE. A common theme amongst the COPE action-items is that the information must be complete, accurate, reliable and available. You may often review the additions and deductions on each of your income and expense statements. Very good! Add to your analysis the review of tax savings you may qualify for and your pre-retirement and tentative retirement tax brackets.

The above list is a starting point for your bookkeeping journey. Many regulatory bodies expect you to be the accounting and financial manager of your household. Therefore, have a strategy and work toward the goal of zero compliance gaps. Use bookkeeping as a tool to assess your tax (and financial) situation and plot a course for where you want to go. We welcome the opportunity to assist you with how to work with the COPE action-items, planning how you may improve your family’s tax situation and filing accurate and complete returns. Happy tax year and best wishes!

1Comment
  • Dionne
    Posted at 05:28h, 15 December Reply

    Helpful! Thanks!

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