With tax season approaching, it's important to have documents that support the deductions you will claim on your taxes. Without a reliable system for documenting your income and expenses, you might miss opportunities for deductions. The accountants at Hal Surratt CPA, located in Archdale, NC, discuss some rules for documenting your deductions.

The average American makes hundreds of purchases that are eligible for deductions, but if they don't document them, they won't be included on their tax returns. Improperly documented deductions are also a problem, especially if you are audited. If you do not have records to back up your deductions, the auditor will most likely refuse to allow it, which could cost you hundreds of dollars. Every deduction you take should be supported by documents that show what you purchased, how much you paid, and the purpose of the expense. Canceled checks, sales receipts, and invoices are some of the document types you should save for your taxes.

An effective way to create a record-keeping system is to use cardboard file boxes and document envelopes to sort your receipts into deduction categories. Keep track of medical, charitable, education, and vehicle-related expenses for each tax year in their own separate envelopes. You can also use personal finance software to download bank and credit card transactions and sort them into expense categories. Accountants recommend keeping copies of your tax returns and supporting documents in case you are audited for at least six years after your return is filed.

The accountants at Hal Surratt CPA will help you with all your tax preparation needs, helping you save the most amount of money possible. Give their tax accounting team a call at (336) 861-4024, or visit their website to learn more about their tax preparation services.