Whether you’re an individual, a busy family, or a small-business owner in Texas, keeping the right tax documents is key to accurate filing and audit protection. Below is a guide to the must-have records, plus tips to keep them organized all year long.
Why Good Recordkeeping Matters
Accurate records help you:
- File a complete and correct return
- Maximize deductions and credits
- Provide proof if the IRS audits you
The IRS explains in detail why keeping records is essential, noting that organized documentation protects you if questions arise about your income, expenses, or deductions.
Even though Texas has no state income tax, federal requirements still apply, and property or franchise tax records can be just as important.
Income Records You Must Keep
You’ll need documentation for all sources of income, including:
- W-2 forms from employers
- 1099 forms (freelance, contractor, or investment income)
- Interest and dividend statements
- Brokerage or cryptocurrency transaction records
The IRS outlines which income records to keep depending on your type of work or business, helping you identify exactly which documents to save. Keep these records for at least three years after filing (or up to seven if there's any chance of underreported income by more than 25%).
Expense & Deduction Documents
Deductions lower your taxable income—if you can prove them. Hold on to:
- Mortgage interest statements (Form 1098)
- Charitable donation receipts
- Medical expense receipts
- Childcare records and education expenses
Self-employed or small-business owners should also save:
- Business invoices and receipts
- Mileage logs and travel records
- Proof of home-office expenses
Property & Investment Records
Homeowners and investors need to track:
- Property tax statements and assessments
- Closing disclosures and home improvement receipts (for capital gains calculations)
- Records of investment purchases and sales
These documents establish cost basis and can reduce future taxes when you sell.
Organization & Storage Tips
Keep both paper and digital copies so you’re protected from loss or damage.
Practical ideas:
- Create labeled folders by tax year
- Use secure cloud storage or an encrypted drive
- Retain records at least 3 years, and 7 years for major transactions, if you file late, or if there's any underreported income
When to Seek Professional Help
Consider a tax attorney if you:
- Have complex investments or multiple income streams
- Are self-employed
- Receive an IRS notice or face an audit
Why Choose Powell Tax Law
The team at Powell Tax Law helps Texans with everything from routine filings to complex IRS matters. Our services include:
- Audit defense & IRS representation – Skilled support for audits, wage garnishments, and levies.
- Comprehensive IRS solutions – Assistance with back taxes, penalty abatements, offers in compromise, and installment agreements.
- Customized strategies – Guidance tailored to your unique situation, whether it’s your type of business, multiple income streams, or other federal tax challenges.
With more than 23 years of experience, we’ve handled nearly every tax scenario—and we’re ready to help with yours.
Get Ready for a Stress-Free Tax Season
The sooner you organize your 2025 tax documents, the smoother filing will be.
Need expert help? Contact Powell Tax Law today to protect your records and your peace of mind.
