How Long Should I Keep My Records?

How long should I keep my records? That is the question. The length of time depends upon the expense or event that the document contains.  It is important to keep your records until the period of limitations for the document expires.

What is the period of limitations? - The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax.

Accordingto the IRS you should keep your tax records for 3 years if you do not owe additional tax and the following situations do NOT apply to you:

1)   You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years. 

2)   You file a fraudulent return; keep records indefinitely. 

3)   You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. 

4)   You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years. 

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

So a good rule of thumb is to keep your records at least 5 years, due to the state goes back 5 years when it comes to sales tax and the IRS can audit up to 3 years. Don’t go overboard with your record keeping. Pay attention to dates and toss out what you don’t need. If you would like “The Professor” to review your tax documents with you feel free to contact us and we will set up an appointment. We are here to make taxes easier for you and to keep you informed on the ever changing law.

I Received My Tax Refund, Now What?

So you have received your tax refund? Are you trying to decide what to do with the money. Should you invest or go on a shopping spree? That is usually the struggle that many people deal with every year.

Let us help you decide what to do with your tax return.

Pay off Debts:

Ø  Credit cards

Ø  Pre-pay mortgage

Ø  Pay off student loans

Ø  Car loan

Remember to do this in baby steps. Pay off the smallest debt first, then stack that payment onto another debt and so forth. This will help you pay off debt more quickly. You’re already paying out each month, so why not get out of debt?

Savings and Investing:

Ø  IRA (Individual Retirement Account)

·       Use your refund to increase your retirement plan contribution

·       If you don’t have a retirement plan at work or if you’re contributing  the minimum, you can use your tax refund to contribute to a Roth IRA.

Ø  529 Plan or Qualified Tuition Programs (QTPs) 

·       This is an education savings plan operated by the state or educational intuition designed to help families save money for their children’s college tuition.

Emergency fund:

Ø    This fund is in case of an actual emergency, such as the loss of a job, an illness or major expense. A good rule of thumb is to have at least enough money saved in this account to cover at least 3-6 months of living expenses.

Ø    A CD fund or money market account are great options.

Save:

Ø    Of course you can save your refund to go toward purchasing a new vehicle. If possible save up enough money to buy a new vehicle with cash that way you don’t have to worry about payments.

Ø   How about saving for a family vacation. We all need to have fun and get away every once in a while!

Donate to charity:

Ø    If you have things caught up, you can always help those in need. Now more than ever, charities are in desperate need of donations.

As you can see there are many ways in which you can use your tax return. We wanted to give you some ideas of the best ways to invest, save and get out of debt. If you would like to find out more ways to use your tax return or simply would like a consultation regarding taxes, bookkeeping or accounting, contact us and we will gladly help you.

Maria Enjoys Reliable Accounting Services with Professor Tax USA, Inc.

Professor Tax continues to travel to New Mexico! We want you to meet another one of our magnificent clients, Maria Flores. Maria is the owner of I & B Transport & Storage Inc. located in Columbus, New Mexico. I & B Transport and Storage is a private company that was established and incorporated in 2005.

I & B offers two types of services:

1.   Transportation

2.   Storage

Their transportation services use big rigs (AKA 18 wheelers) to transport. One type of trailer used for transportation is a flatbed trailer for heavy equipment and other large items. The second type is a Reefer trailer for other goods, such as produce. Reefer trailers are enclosed and contain an air conditioner. This keeps produce cold when being transported to the grocery store.

I & B Transport and Storage have been clients of Professor Tax USA since 2005. They were in need of a new accountant and Henry came in at exactly the right time. Professor Tax provides a variety of services for I & B. He takes care of the taxes, bookkeeping, accounting, corporate paperwork, quarterlies and more. Henry and Daryl alternate coming out every 2 months to I & B Transport and Storage for a personal consultation and take care of any needs the business may need.

“Henry is easy to contact”, says Maria. “He’s always there when you need him and he will always help you out.” “He is very friendly!”

When asked, what is the best way to describe the services you have received from Professor Tax? Maria says, “I don’t have the words for that.” “He’s there anytime you need him if you have questions.”

Maria states, “I wish there were more reliable people like Henry.” When he goes on vacation you can leave him a voicemail and he will contact you.”

As you can see, “The Professor” will travel to you. Your business is important and Professor Tax knows this and wants you to be less concerned about taxes, bookkeeping and accounting.  Contact Professor Tax if you would like a FREE face to face consultation.

Proud Members of Northwest Florida’s Better Business Bureau - Professor Tax USA

Did you know Professor Tax USA has an A+ rating with the Better Business Bureau? They have been BBB Accredited since February 14, 2001.

The BBB rates your business on a scale of A+ to F. There are 16 Rating factors that determine your BBB rating.  Several factors that raised Professor Tax USA’s rating are:

§  Length of time business has been operating.  Over 30 years of experience.
    

§  No complaints filed with the Better Business Bureau.

§  BBB has sufficient background information on this business.

BBB Accreditation Standards

§       In order to be accredited by BBB a business or organization confirms that it meets and will abide by the following standards:

§        Build Trust
Establish and maintain a positive track record in the marketplace.

§        Advertise Honestly
Adhere to established standards of advertising and selling.

§       Tell the Truth
Honestly represent products and services, including clear and adequate disclosures of all material terms.

§        Be Transparent
Openly identify the nature, location, and ownership of the business, and clearly disclose all policies, guarantees and procedures that bear on a customer’s decision to buy.

§        Honor Promises
Abide by all written agreements and verbal representations.

§        Be Responsive Address marketplace disputes quickly, professionally, and in good faith.

§        Safeguard Privacy
Protect any data collected against mishandling and fraud, collect personal information only as needed, and respect the preferences of consumers regarding the use of their information.

§        Approach all business dealings, marketplace transactions and commitments with integrity.

As you can see Professor Tax USA is highly accredited. If you need bookkeeping or tax advice or services for your business be sure you contact Professor Tax USA! Can't get out of the office, your in luck, "The Professor" will travel to you!