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Frequently asked questions about taxes, accounting, and business.
How long do I need to keep certain records?
Records such as receipts, canceled checks, and other documents that prove an item of income or a deduction appearing on your return should be kept until the statute of limitations expires for
that return.
Usually this is three years from the date the return was due or filed, or two years from the date the tax was paid. You should keep some records indefinitely, such as property records, you may need them to provide informatin on gains or losses on future returns.
Do I need an accountant?
When you select a licensed accounting professional, you are gaining a trusted business advisor. Some accountants focus on specific industries, while others specialize in services such as
tax or audit.
A good accountant is as integral to managing the messy aspects of life as a doctor, lawyer or insurance agent. Depending on individual circumstances, you may need an accountant no matter what your income. And when tax time comes around, you may require an accountant’s help if any of the following applied to you in the last year:
- Marriage
- Free-lance or “on-the-side” wages; royalties
- Sale of any investment (including real estate)
- New job
- Home-ownership
- Self-employment
- Distribution from an IRA, 401(k) or 403(b)
- Inheritance
I recently opened a new account at the bank, and they asked me to complete a Form W-9. Is this necessary?
Your investment income is generally not subject to regular withholding, however, it may be subject to backup withholding to ensure that income tax is collected on this income.
Under backup withholding, when you open a new account you must certify under penalties of perjury that your social security number is correct and that you are not subject to backup withholding.
The form W-9 is used to make this certification. If you fail to do so, backup withholding may begin immediatley on your new account, and 31% of the interest paid on your account will be withheld.
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