Property and home documents
In the short-term, the papers related to the sale of your home are useful, especially if you’re a first-time home buyer and may benefit from some tax credits. In addition, you can get a deduction for state property taxes paid.
In the long term, documents related to property or home improvement should be stored properly for audits, or if you make a home improvement that boosts the value of your home. Keeping such papers in handy is something most real estate experts advise their clients to do but it’s still one of the mistakes first-time homebuyers constantly make.
Bank records and receipts
“The IRS relies on bank records, so it is important for them to have access to them if you’re ever put on the spot with an audit,” says Parent. Bank records and receipts are considered “supporting documents,” which means they can be used as documented proof of income and expenses for the IRS. Parent also recommends keeping medical records and copies of expenses in the case of an audit.
