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Almost every tax preparation expert will tell you to “save your receipts,” but how important are they? After all, it’s easy to get disorganized, and by the end of the year you might not remember what the purchases were for. However, as overwhelming as those receipts can get, there are a few reasons to hold onto them.

How Important Is It to Keep Your Receipts?

Remembering Deductions

During tax preparation season, it’s almost impossible to remember every purchase you made throughout the year. Going through all your receipts with a CPA will remind you of deductible expenses. The tax preparer may even find some you didn’t know you qualified for. By maximizing the deductions, keeping receipts can lower your tax burden, letting you hold onto more money.

Preparing for an Audit

tax preparationAn IRS audit may sound terrifying, but it doesn’t have to be a painful experience. In most cases, they’ll want to see receipts for some of the deductions you’ve claimed. If you have them handy, it’s easy to supply the documentation they need. However, without the receipts, you could wind up paying additional taxes and penalties.

Digitizing Your Records

Fortunately, holding onto receipts doesn’t mean having a shoebox full of papers in the filing cabinet anymore. A variety of phone apps and online tools allow you to easily take photos of receipts, categorize them, and upload them to the cloud for safekeeping.

 

For nearly 30 years, the professionals at Lee & Smith, PLLC have provided insightful tax preparation and advice to clients throughout the Texarkana area. With their wide range of services and thorough knowledge, they will take care of all your financial needs. To learn more about preparing your taxes, visit their website or call (903) 832-4339. Follow their Facebook for more tips and advice.

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