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If you have income tax deductions, you must keep records in receipts of everything. Even if you go to a tax professional to get your taxes done, you still have to keep a hold of each and every receipt you ever get. If that receipt is related to an income tax deduction then you must have it if the IRS asks to see it. Most of the time if your taxes are simple enough, and you have gone to someone to prepare your taxes, the IRS will not bother to audit you. However if something seems to be askew in your income tax return or when your income tax deductions, you can bet they may be paying you a visit very soon.
I am not the most organized person in the world so I keep a special book for my income tax deductions. The front part of the book are used to record every single dollar I’d make and they make sure that I know who paid me and what the pay was for. In the back of the book I keep track of every single one of my income tax deductions and have a special folder in my filing cabinet for each and every receipt. Though I try to be very good about this, I know I am missing some things. I bought software for work purposes that cost me $100. I am afraid I have lost that receipt. No matter how dedicated I am to keeping things together, something always ends up getting lost.
I work from home, and my income tax deductions are minimal. However, as long as I am making more of a profit than I am claiming in deductions I should be just fine. I am an honest person, but the IRS knows that many people are not. When it comes to reporting how much money you made, and claiming income tax deductions, make sure you are as truthful as you possibly can be. Even leaving a couple hundred dollars worth of income off of your income tax return can spell big problems for you. There’s nothing funny about income tax evasion, and what will happen to you if you’re caught.
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