IRS Publication 17 — Your Federal Income Tax (Individuals)

You must keep records so that you can prepare a complete and accurate income tax return. The law doesn’t require any special form of records. However, you should keep all receipts, canceled checks or other proof of payment, and any other records to support any deductions or credits you claim. If you file a claim for refund, you must be able to prove by your records that you have overpaid your tax.

This part doesn’t discuss the records you should keep when operating a business. For information on business records, see Pub. 583. Why Keep Records?

Good records help you:

• Identify sources of income. Your records can identify the sources of your income to help you separate business from nonbusiness income and taxable from nontaxable income.

• Keep track of expenses. You can use your records to identify expenses for which you can claim a deduction. This helps you determine if you can itemize deductions on your tax return.

• Keep track of the basis of property. You need to keep records that show the basis of your property. This includes the original cost or other basis of the property and any improvements you made.

• Prepare tax returns. You need records to prepare your tax return.

• Support items reported on tax returns.

The IRS may question an item on your return. Your records will help you explain any item and arrive at the correct tax. If you can’t produce the correct documents, you may have to pay additional tax and be subject to penalties. Kinds of Records To Keep The IRS doesn’t require you to keep your records in a particular way. Keep them in a manner that allows you and the IRS to determine your correct tax.

You can use your checkbook to keep a record of your income and expenses. You also need to keep documents, such as receipts and sales slips, that can help prove a deduction. In this section, you will find guidance about basic records that everyone should keep. The section also provides guidance about specific records you should keep for certain items. Electronic records. All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. For details on electronic storage system requirements, see Revenue Procedure 97 -22, which is on page 9 of Internal Revenue Bulletin 1997-13 at IRS.gov/pub/irs-irbs/irb97-13.pdf. Copies of tax returns. You should keep copies of your tax returns as part of your tax reRECORDS cords. They can help you prepare future tax returns, and you will need them if you file an amended return or are audited. Copies of your returns and other records can be helpful to your survivor or the executor or administrator of your estate.