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CCH Outlines How to Get Organized Before Tackling Taxes

(RIVERWOODS, ILL., March 2, 2006)– Whether or not you are an organized person day-to-day, come tax time, you do have to pull all the information needed to complete your tax returns together into one place. This is a tax fact of life whether you do your taxes manually, use online or software tax preparation programs or hire a tax professional, according to CCH, a Wolters Kluwer business and a leading provider of tax and accounting law information, software and services.

“If you’re even somewhat organized, you’ve probably been amassing a small pile of information related to taxes over the last few months,” said Paul Gada, JD, author of the CCH Toolkit Tax Guide 2006 and Tax Tips newsletter for CCH CompleteTax (, an online tax preparation and e-filing service for the do-it-yourself taxpayer.

According to Gada, among the key materials you should have on hand when you start working on your tax returns:

  • Your 2004 tax return (and your spouse’s if you are now filing jointly and did not last year). If you’re using tax software that you used last year, it should remember this information for you.
  • Your Social Security number as well as those for your spouse and children or any other dependents you will be claiming on your return.
  • All W-2s, 1099s, mortgage interest statements and any other statements relating to income or tax deductible expenses; for example, bank or brokerage statements, receipts from charitable organizations, etc.
  • Sole proprietors also should have printed records of their financial statements, mileage logs and other expenses.
  • If you’re expecting a refund and want it deposited directly into your bank account, you will need the bank name, your routing number (RTN) and account number – all of which are on the front of your checks.

Staying Organized: Retaining Records over Time

One of the benefits of using tax prep software is that some of the information you need can be imported from other sources, for example, your W-2 information. However, Gada cautions you should still keep paper records of all important documents related to taxes.

“If you are audited, the IRS wants to see printed proof and, often times, original documents, for example receipts from expenses or contributions,” said Gada, adding that there are other reasons for holding on to records over time, such as determining original purchase prices for certain assets,

So, while you are compiling information to get your taxes done during the next few weeks, among those documents you’ll want to hold on to and find a proper long-term filing system for are:

  • The source of all income you receive, including W-2 forms, 1099 and 1098 forms, and year-end comprehensive statements from financial institutions.
  • For any deductible item, you should retain documents proving the expense itself for any deductible items, such as a receipt or invoice, and proving that you paid it, such as a canceled check or credit card slip.
  • If you receive or pay alimony, you should keep a copy of the separation agreement or divorce decree.
  • If you are claiming the child care credit, you must keep records of the name, address, and Social Security number or employer identification number of all caregivers.
  • If you are claiming deductions for charitable deductions, you may need to get a receipt from the organization to which you made the donation, or an appraisal of the item.
  • If you have gambling winnings, you should be keeping a diary of your winnings and losses that includes the date, type of activity, and location of the establishment, the names of other people who were present, and the amount you won or lost.
  • For small business owners and sole proprietors, additional records need to be retained related to their business, for example, business bank account information, supporting documents for business transactions and detailed records for special expenses such as travel and entertainment. They also need to keep records on automobile expenses such as business-use mileage and records on capital asset equipment, including real estate and other long-term assets that were used in their business.

All of these records must be kept as long as they may be relevant for any tax purpose. Generally, this means keeping all records that support items on a tax return for at least four years, since the IRS may challenge a return for up to three years after its due date.

Some records need to be kept even longer, for example, records for capital assets such as real estate, business equipment and investments, should be maintained as long as you own the assets, since you will need this original information to determine your taxable gain or loss upon sale of the asset, and you may need them to support depreciation or casualty loss deductions along the way. Also, any taxpayers that have ever made any nondeductible IRA contributions, must retain the Forms 8606 from each year a contribution was made or a distribution received from any IRAs.

Also, taxpayers should be sure to keep copies of their income tax returns indefinitely. Gada notes that if your return is ever challenged for something serious such as fraud or not filing a tax return, the IRS can go back in time to examine your returns for as many years as it thinks necessary.

About CCH CompleteTax and Other Consumer Tax Resources

CCH CompleteTax ( is an online tax preparation and e-filing service for the do-it-yourself taxpayer, allowing them to prepare and e-file a federal return for just $24.95 and a state return for $9.95.

CCH Toolkit Tax Guide 2006 is an authoritative resource guide which helps taxpayers manage their taxes, prepare their tax returns and consider effective tax planning strategies. It is available in bookstores nationwide and through online book retailers. Purchasers of the Guide also receive access to CCH CompleteTax to prepare and e-file for free one state and federal tax return.

CCH Business Owner’s Toolkit ( offers a comprehensive online resource for entrepreneurs in helping them start, run and grow their small businesses as well as effectively control their taxes, while the CCH Financial Planning Toolkit ( offers individuals valuable information for year-round financial planning.

About CCH, a Wolters Kluwer business

CCH, a Wolters Kluwer business ( is a leading provider of tax, audit and accounting information, software and services. It has served tax, accounting and business professionals and their clients since 1913. Among its market-leading products are The ProSystem fx® Office, CCH® Tax Research Network™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.

Wolters Kluwer is a leading multinational publisher and information services company. Wolters Kluwer has annual revenues (2005) of €3.4 billion, employs approximately 18,400 people worldwide and maintains operations across Europe, North America and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands ( Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

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