you need to keep for the  current year. Generally speaking, you'll need records of income items and deductible expenses. Use your 2007 tax return as a guide.
 

 

 

 

 

* YOU'LL ALSO NEED TO KEEP SOME ITEMS for longer
  periods. For example, you may need purchase records
  for your house and other investments years later to
  calculate your capital gains.

* SET UP A FILING PLACE for each category. Use folders
  or plastic pouches for paper records, such as
  charitable receipts, property tax payments, and
  mortgage reports.

* IF YOU MANAGE YOUR BANKING AND FINANCES  ONLINE,           

  open up a series of folders on your hard drive. Save
  copies of electronic statements or transaction
  receipts in the relevant folder. Remember to make
  regular data backups.

* THEN STAY CURRENT with your records as you go through
  the year. It's easier to spend a few minutes each
  month than to have to spend hours reconstructing    
  everything at the end of twelve months.

* AT THE END OF EACH MONTH, highlight income and   deduction items in your check register. Use one color  for charitable contributions, another for work
expenses, and so on. You can do this whether you keep your register on paper or on a computer. Make sure any associated receipts are filed away correctly.

 

* AT YEAR-END, you should know exactly what falls into
  each category and where the records are.