Having the appropriate records and documents does not necessarily guarantee you will be able to take advantage of the corresponding tax benefits. Your eligibility for exemption of certain income, and for certain tax deductions and credits will be determined when you do your tax return. But in order to determine whether you qualify for these tax benefits, you will still need to have records and documentation.
The above listing of records to keep is not intended to be all-inclusive, but rather as a guideline and reminder. You will need to keep abreast of changes in the tax law each year to see what new deductions and credits you may be able to take, and the records you will need to substantiate them.
If you choose to keep your records on paper rather than, or in addition to an electronic format, you can organize your paper documents in folders and files, just as you would with electronic documents. All references to records and documents include both electronic and printed format.
By keeping up with your record-keeping throughout the year, you spread the income tax preparation workload out over the year and significantly reduce the time and energy you will have to put into getting your records together when it comes time to actually prepare your return.
The time it takes you to keep logs or diaries of your expenses, make notations on receipts, and generally organize your records, will pay significant dividends at year-end.