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If you rent your home, record
keeping is relatively simple:
Keep a copy of your lease along
with rent receipts or canceled or imaged
checks in a file folder should
any disputes arise with your
landlord. Also retain a checklist
documenting the condition of
the property when you move in.
If you are purchasing a home,
retain copies of documents received at closing.
Document Improvements
In a separate folder, store receipts
documenting home improvement
expenses. Having records
of the money you invested into your
home may help reduce your federal income tax liability when
you sell your home.
When documenting these
expenses, it is best to retain
original receipts. If you do not
have receipts, the IRS will generally
accept canceled or imaged checks,
contracts, building permits, or
before-and-after photographs.
All records relating to the
purchase or sale of your home
and any improvement expenses
should be retained for at least
3 years after the year in which
you file your federal income
tax return to report the sale
of your home.
Maintaining accurate records
on each transaction is vital
to determine your future federal
income tax liability. If you sell a
home to someone who assumes
your Veterans Administration
(VA) or Federal Housing Administration
(FHA) loan, it is
essential to keep complete sale
records because you are responsible
for the loan until it is paid
in full.
In addition, retain records documenting
your annual property
tax payment and the statement
of total interest paid from your
mortgage lender.
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Basic Money Management
Basic Money Management
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