Department of the Treasury Contents

Internal Revenue Service Introduction .............................. 1

Why Keep Records? ........................ 2

Publication 552 Kinds of Records To Keep ................... 2

(Rev. April 2005) Basic Records .......................... 2

Cat. No. 15100V Specific Records ........................ 3

How Long To Keep Records ................. 6

Recordkeeping How To Get Tax Help ....................... 7

for Individuals Introduction

This publication discusses why you should keep records,

what kinds of records you should keep, and how long you

should keep them.

You probably already keep records in your daily routine.

This includes keeping receipts for purchases and recording information in your checkbook. Use this publication to

determine if you need to keep additional information in

your records.

Throughout this publication we refer you to other IRS

publications for additional information. See How To Get

Tax Help in the back of this publication for information

about getting publications and forms.

This publication does not discuss the records you

should keep when operating a business. For information

on business records, see Publication 583, Starting a Business and Keeping Records.

Comments and suggestions. We welcome your comments about this publication and your suggestions for

future editions.

You can write to us at the following address.

Internal Revenue Service

Individual Forms and Publications Branch

SE:W:CAR:MP:T:I

1111 Constitution Ave. NW, IR-6406

Washington, DC 20224

We respond to many letters by telephone. Therefore, it

would be helpful if you would include your daytime phone

number, including the area code, in your correspondence.

You can email us at *taxforms@irs.gov. (The asterisk

must be included in the address.) Please put “Publications

Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your

feedback and will consider your comments as we revise

our tax products.

Tax questions. If you have a tax question, visit

www.irs.gov or call 1-800-829-1040. We cannot answer

Get forms and other information tax questions at either of the addresses listed above.

faster and easier by: Ordering forms and publications. Visit www.irs.gov/

formspubs to download forms and publications, call Internet • www.irs.gov 1-800-829-3676, or write to the National Distribution

FAX • 703–368–9694 (from your fax machine) Center at the address shown under How To Get Tax Help

in the back of this publication.
If you use a computerized system, you must be able to

Why Keep Records? produce legible records of the information needed to determine your correct tax liability. In addition to your computerThere are many reasons to keep records. In addition to tax ized records, you must keep proof of payment, receipts,

purposes, you may need to keep records for insurance and other documents to prove the amounts shown on your

purposes or for getting a loan. Good records will help you: tax return.

• Identify sources of income. You may receive Copies of tax returns. You should keep copies of your money or property from a variety of sources. Your tax returns as part of your tax records. They can help you records can identify the sources of your income. You prepare future tax returns, and you will need them if you file need this information to separate business from non- an amended return. Copies of your returns and other business income and taxable from nontaxable in- records can be helpful to your survivor or the executor or

come. administrator of your estate.

• Keep track of expenses. If necessary, you can request a copy of a return and all You may forget an expense unless you record it when it occurs. You can attachments (including Form W-2) from the IRS by using

use your records to identify expenses for which you Form 4506, Request for Copy of Tax Return. There is a

can claim a deduction. This will help you determine if charge for a copy of a return. For information on the cost

you can itemize deductions on your tax return. and where to file, see the Form 4506 instructions.

If you just need information from your return, you can • Keep track of the basis of property. You need to order a transcript by calling 1-800-829-1040, or using Form keep records that show the basis of your property. 4506-T, Request for Transcript of Tax Return. There is no This includes the original cost or other basis of the fee for a transcript. Transcripts are available for the current property and any improvements you made. year and returns processed in the 3 prior years.

• Prepare tax returns. You need records to prepare

your tax return. Good records help you to file quickly Basic Records

and accurately.

Basic records are documents that everybody should keep. • Support items reported on tax returns. You must These are the records that prove your income and ex- keep records in case the IRS has a question about penses. If you own a home or investments, your basic an item on your return. If the IRS examines your tax records should contain documents related to those items. return, you may be asked to explain the items re- Table 1 lists documents you should keep as basic records. ported. Good records will help you explain any item Following Table 1 are examples of information you can get and arrive at the correct tax with a minimum of effort. from these records. If you do not have records, you may have to spend

time getting statements and receipts from various Table 1. Proof of Income and Expense sources. If you cannot produce the correct documents, you may have to pay additional tax and be FOR items concerning KEEP as basic records...

subject to penalties. your...

Income • Form(s) W-2

• Form(s) 1099

Kinds of Records To Keep • Bank statements

• Brokerage statements

• Form(s) K-1 The IRS does not require you to keep your records in a

particular way. Keep them in a manner that allows you and Expenses • Sales slips the IRS to determine your correct tax. • Invoices

You can use your checkbook to keep a record of your • Receipts

income and expenses. In your checkbook you should re- • Canceled checks or other

cord amounts, sources of deposits, and types of expenses. proof of payment

You also need to keep documents, such as receipts and Home • Closing statements sales slips, that can help prove a deduction. • Purchase and sales You should keep your records in an orderly fashion and invoices in a safe place. Keep them by year and type of income or • Proof of payment expense. One method is to keep all records related to a • Insurance records particular item in a designated envelope.

In this section you will find guidance about basic records Investments • Brokerage statements

that everyone should keep. The section also provides • Mutual fund statements

guidance about specific records you should keep for cer- • Form(s) 1099

tain items. • Form(s) 2439

Computerized records. Many retail stores sell computer

software packages that you can use for recordkeeping. Income. Your basic records prove the amounts you report

These packages are relatively easy to use and require little as income on your tax return. Your income may include

knowledge of bookkeeping and accounting. wages, dividends, interest, and partnership or S corporaPage 2
tion distributions. Your records also can prove that certain cash, you should get a dated and signed receipt showing

amounts are not taxable, such as tax-exempt interest. the amount and the reason for the payment.

If you make payments by electronic funds transfer you

Note. If you receive a Form W-2, keep Copy C until you may be able to prove payment with an account statement.

begin receiving social security benefits. This will help proTable 2. Proof of Payment tect your benefits in case there is a question about your

work record or earnings in a particular year. Review the IF payment is by... THEN the statement must information shown on your annual (for workers over age show the... 25) Social Security Statement.

Cash • Amount Expenses. Your basic records prove the expenses for • Payee’s name which you claim a deduction (or credit) on your tax return. • Transaction date Your deductions may include alimony, charitable contributions, mortgage interest, and real estate taxes. You may Check • Check number

also have child care expenses for which you can claim a • Amount

credit. • Payee’s name

• Date the check amount

Home. Your basic records should enable you to deter- was posted to the account

mine the basis or adjusted basis of your home. You need by the financial institution

this information to determine if you have a gain or loss Debit or credit card • Amount charged when you sell your home or to figure depreciation if you • Payee’s name use part of your home for business purposes or for rent. • Transaction date Your records should show the purchase price, settlement

or closing costs, and the cost of any improvements. They Electronic funds transfer • Amount transferred

may also show any casualty losses deducted and insur- • Payee’s name

ance reimbursements for casualty losses. Your records • Date the transfer was

should also include a copy of Form 2119, Sale of Your posted to the account by

Home, if you sold your previous home before May 7, 1997, the financial institution

and postponed tax on the gain from that sale. Payroll deduction • Amount For information on which settlement or closing costs are • Payee code included in the basis of your home, see Publication 530, • Transaction date Tax Information for First-Time Homeowners. For information on basis, including the basis of property you receive

other than by purchase, see Publication 551, Basis of Account statements. You may be able to prove payment Assets. with a legible financial account statement prepared by your When you sell your home, your records should show the bank or other financial institution. These statements are sales price and any selling expenses, such as commis- accepted as proof of payment if they show the items sions. For information on selling your home, see Publica- reflected in Table 2. tion 523, Selling Your Home.

Pay statements. You may have deductible expenses Investments. Your basic records should enable you to withheld from your paycheck, such as union dues or medi- determine your basis in an investment and whether you cal insurance premiums. You should keep your year-end have a gain or loss when you sell it. Investments include or final pay statements as proof of payment of these stocks, bonds, and mutual funds. Your records should expenses. show the purchase price, sales price, and commissions.

They may also show any reinvested dividends, stock splits

and dividends, load charges, and original issue discount Specific Records

(OID). This section is an alphabetical list of some items that For information on stocks and bonds, see Publication require specific records in addition to your basic records. 550, Investment Income and Expenses. For information on

mutual funds, see Publication 564, Mutual Fund Distributions. Alimony

If you receive or pay alimony, you should keep a copy of Proof of Payment your written separation agreement or the divorce, separate

maintenance, or support decree. If you pay alimony, you One of your basic records is proof of payment. You should will also need to know your former spouse’s social security keep these records to support certain amounts shown on number. For information on alimony, see Publication 504, your tax return. Proof of payment alone is not proof that the Divorced or Separated Individuals. item claimed on your return is allowable. You should also

keep other documents that will help prove that the item is

allowable. Business Use of Your Home

Generally, you prove payment with a cash receipt, financial account statement, credit card statement, can- You may be able to deduct certain expenses connected

celed check, or substitute check. If you make payments in with the business use of your home. You should keep

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records that show the part of your home that you use for • Other reliable written records that are reasonable

business and the expenses related to that use. For infor- under the circumstances and that include the name

mation on how to allocate expenses between business and of the organization, the amount, and the date of the

personal use, see Publication 587, Business Use of Your contribution.

Home.

Contributions of $250 or more. You can deduct a

contribution of $250 or more only if you have a written Casualty and Theft Losses acknowledgment of your contribution from the organization. To deduct a casualty or theft loss, you must be able to

prove that you had a casualty or theft. Your records also Out-of-pocket expenses. You should keep records of

must be able to support the amount you claim. your out-of-pocket expenses when you perform services

For a casualty loss, your records should show: for a charitable organization. You can record these expenses in a diary. For example, if you use your car when • The type of casualty (car accident, fire, storm, etc.) doing volunteer work, you should record the name of the and when it occurred. organization and the unreimbursed gas and oil expenses

• That the loss was a direct result of the casualty. directly related to the volunteer work. If you do not want to

keep records of your actual expenses, you can keep a log • That you were the owner of the property. of the miles you drove your car for the charitable purpose

and use the standard mileage rate shown in Publication For a theft loss, your records should show: 526. You should also keep records of any parking fees,

• When you discovered your property was missing, tolls, taxi fares, and bus fares.

• That your property was stolen, and Property. For each contribution of property, you must

keep a receipt from the organization showing: • That you were the owner of the property.

• The name of the organization, For more information, see Publication 547, Casualties,

Disasters, and Thefts. For a workbook designed to help • The date and location of the contribution, and

you figure your loss, see Publication 584, Casualty, Disas- • A reasonably detailed description of the property. ter, and Theft Loss Workbook (Personal-Use Property).

A letter or other written communication from the organization containing the above information will serve as a Child Care Credit receipt.

You must give the name, address, and taxpayer identifica- You also must keep reliable written records for each

item of donated property. These records must include the: tion number for all persons or organizations that provide

care for your child or dependent. You can use Form W-10, • Fair market value of the property at the time of the Dependent Care Provider’s Identification and Certification, contribution, or various other sources to get the information from the • Cost or other basis of the property, and care provider. Keep this information with your tax records.

For information on the credit, see Publication 503, Child • Terms of any conditions attached to the contribution. and Dependent Care Expenses.

Cars, boats, and aircraft. If the claimed value of a car,

boat, or aircraft you donate to a qualified organization after Contributions December 31, 2004, is over $500, your deduction may be

The kinds of records you must keep for charitable contribu- limited. You must have a written acknowledgement of your

donation from the organization and must attach it to your tions depend on the amount of the contribution and

whether the contribution is in cash. For information on return. This also applies to donations of any vehicle manufactured for use on public streets, roads, and highways. contributions, see Publication 526, Charitable Contribu- You should keep a copy of the acknowledgement for your tions.

records.

Contributions from which you benefit. Generally, if you

make a charitable contribution that is more than $75 and is Credit for the Elderly or the Disabled partly for goods or services, the organization must give you

a written statement that you should keep. If you are under age 65, you must have your physician

complete a statement certifying that you were permanently Cash. Cash contributions include those paid by cash, and totally disabled on the date you retired. check, credit card, or payroll deduction. For each cash You do not have to file this statement with your Form contribution, you must keep one of the following: 1040 or Form 1040A, but you must keep it for your records.

• A canceled check or other proof of payment, Veterans. If the Department of Veterans Affairs (VA)

• A receipt from the organization showing the name of certifies that you are permanently and totally disabled, you

the organization, the amount, and date of the contri- can substitute VA Form 21-0172, Certification of Permabution, or nent and Total Disability, for the physician’s statement you

Page 4
are required to keep. See Publication 524, Credit for the Individual Retirement Arrangements (IRAs) Elderly or the Disabled, for more information.

Keep copies of the following forms and records until all

distributions are made from your IRA(s). Education Expenses • Form 5498, IRA Contribution Information, or similar

If you have the records to prove your expenses, you may statement received for each year showing contribube entitled to claim certain tax benefits for your education tions you made, distributions you received, and the

expenses. You may qualify to exclude from income items value of your IRA(s).

such as a qualified scholarship, interest on U.S. savings • Form 1099-R, Distribution From Pensions, Annuities, bonds, or reimbursement from your employer. You may Retirement or Profit-Sharing Plans, IRAs, Insurance also qualify for certain credits or deductions. For informa- Contracts, etc., received for each year you received tion on qualified education expenses, see Publication 970, a distribution. Tax Benefits for Education.

• Form 8606, Nondeductible IRAs, for each year you

made a nondeductible contribution to your IRA or Exemptions received distributions from an IRA if you ever made

nondeductible contributions. If you are claiming an exemption for a person under a

multiple support agreement, you must get a signed state- For a worksheet you can use to keep a record of yearly

ment from all other eligible individuals who could have contributions and distributions, see Publication 590, Indiclaimed the exemption. You must keep these statements vidual Retirement Arrangements (IRAs).

in your records. For information on exemptions, see Publication 501, Exemptions, Standard Deduction, and Filing Medical and Dental Expenses

Information.

In addition to records you keep of regular medical expenses, you should keep records on transportation ex- Employee Business Expenses penses that are primarily for and essential to medical care.

You can record these expenses in a diary. You should If you have employee business expenses, see Publication record gas and oil expenses directly related to that trans- 463, Travel, Entertainment, Gift, and Car Expenses, for a portation. If you do not want to keep records of your actual discussion of what records to keep. expenses, you can keep a log of the miles you drive your

car for medical purposes and use the standard mileage

Gambling Winnings and Losses rate. You should also keep records of any parking fees,

tolls, taxi fares, and bus fares.

You must keep an accurate diary of your winnings and For information on medical expenses and the standard

losses that includes the: mileage rate, see Publication 502, Medical and Dental

Expenses. • Date and type of gambling activity,

• Name and address or location of the gambling es- Mortgage Interest tablishment,

• Names of other persons present with you at the If you paid mortgage interest of $600 or more, you should

gambling establishment, and receive Form 1098, Mortgage Interest Statement. Keep

this form and your mortgage statement and loan informa- • Amount you won or lost. tion in your records. For information on mortgage interest,

see Publication 936, Home Mortgage Interest Deduction. In addition to your diary, you should keep other documents. See the discussion related to gambling losses in

Publication 529, Miscellaneous Deductions, for docu- Moving Expenses ments you should keep.

You may be able to deduct qualified moving expenses that

are not reimbursed. For more information on what ex- Health Savings Account (HSA) and penses qualify and what records you need, see Publication

Medical Savings Account (MSA) 521, Moving Expenses.

For each qualified medical expense you deduct or pay with

a distribution from your HSA or MSA, you must keep a Pensions and Annuities

record of the name and address of each person you paid

and the amount and date of the payment. For more infor- Use the worksheet in your tax return instructions to figure

mation, see Publication 969, Health Savings Accounts and the taxable part of your pension or annuity. Keep a copy of

Other Tax-Favored Health Plans. the completed worksheet until you fully recover your contributions. For information on pensions and annuities, see

Publication 575, Pension and Annuity Income, or Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits.

Page 5
Taxes Table 3. Period of Limitations

Form(s) W-2 and Form(s) 1099-R show state income tax IF you... THEN the

period is... withheld from your wages and pensions. You should keep

a copy of these forms to prove the amount of state with- 1 Owe additional tax and 3 years

holding. If you made estimated state income tax payments, (2), (3), and (4) do not

you need to keep a copy of the form or your check(s). apply to you

You also need to keep copies of your state income tax 2 Do not report income that 6 years returns. If you received a refund of state income taxes, the you should and it is more

state may send you Form 1099-G, Certain Government than 25% of the gross

Payments. income shown on your

Keep mortgage statements, tax assessments, or other return

documents as records of the real estate and personal 3 File a fraudulent return No limit

property taxes you paid. 4 Do not file a return No limit If you deducted actual state and local general sales

taxes instead of using the optional state sales tax tables, 5 File a claim for credit or Later of 3 years or 2

refund after you filed years after tax was you must keep your actual receipts showing general sales your return paid. taxes paid.

6 File a claim for a loss from 7 years

worthless securities

Tips

You must keep a daily record to accurately report your tips Property. Keep records relating to property until the peon your return. You can use Form 4070A, Employee’s riod of limitations expires for the year in which you dispose

Daily Record of Tips, which is found in Publication 1244, of the property in a taxable disposition. You must keep

Employee’s Daily Record of Tips and Report to Employer, these records to figure your basis for computing gain or

loss when you sell or otherwise dispose of the property. to record your tips. For information on tips, see Publication

531, Reporting Tip Income. Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis

of the property you gave up. You must keep the records on

How Long To Keep Records the old property, as well as the new property, until the

period of limitations expires for the year in which you

dispose of the new property in a taxable disposition. You must keep your records as long as they may be

needed for the administration of any provision of the Inter- Keeping records for nontax purposes. When your recnal Revenue Code. Generally, this means you must keep ords are no longer needed for tax purposes, do not discard

records that support items shown on your return until the them until you check to see if they should be kept longer for

period of limitations for that return runs out. other purposes. Your insurance company or creditors may

The period of limitations is the period of time in which require you to keep certain records longer than the IRS

you can amend your return to claim a credit or refund or the does.

IRS can assess additional tax. Table 3 contains the periods of limitations that apply to income tax returns. Unless

otherwise stated, the years refer to the period beginning

after the return was filed. Returns filed before the due date

are treated as being filed on the due date.

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• Figure your withholding allowances using our Form

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Page 7
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You can set up an appointment by calling your local 3207, The Small Business Resource Guide,

Center and, at the prompt, leaving a message re- CD-ROM 2004, is a must for every small busiquesting Everyday Tax Solutions help. A representa- ness owner or any taxpayer about to start a business. This

handy, interactive CD contains all the business tax forms, tive will call you back within 2 business days to

schedule an in-person appointment at your conve- instructions, and publications needed to successfully mannience. To find the number, go to age a business. In addition, the CD provides other helpful

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Service. design of the CD makes finding information easy and quick

and incorporates file formats and browsers that can be run

on virtually any desktop or laptop computer. Mail. You can send your order for forms, instruc- It is available in early April. You can get a free copy by tions, and publications to the National Distribution calling 1-800-829-3676 or by visiting www.irs.gov/ Center. You will receive a response within 10 smallbiz. business days after your request is received. Use the

following address.

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