Green is obviously the color du jour on St. Patrick's Day.
But going green with your tax receipts by converting the paper to digital format works today and every other day of the year.
In fact, cleaning out your crowded tax files and putting the info on your computer or other digital device is such a good idea that it's today's Daily Tax Tip.
If you're wondering whether the Internal Revenue Service is OK with the change, the answer is yes.
The IRS actually has been accepting electronic and scanned receipts, bills or other tax deduction documents as proof of tax claims since 1997.
That year the IRS issued Revenue Procedure 97-22 as guidance to taxpayers on maintaining electronic books and records. A follow-up announcement the next year, Revenue Procedure 98-25, has additional information.
What the IRS expects: The main thing, notes the IRS, is that the digital versions "exhibit a high degree of legibility and readability when displayed on a video display terminal and when reproduced in hard copy."
Basically, the IRS won't accept sloppy documentation in any form.
Want something more recent? Then check out page 2 of IRS Publication 552, Recordkeeping for Individuals.
Under the subheading Electronic records, the IRS basically says electronic methods of tax recordkeeping are just fine as long as you follow the same rules that apply to paper records.
That means the digital images must show the same information as the paper document and you must be able to produce the electronic copies if the IRS asks.
The IRS even produced a video discussing what it expects from electronic records.
So you've decided this is the year you clear out the clutter and transfer your tax document to an electronic format.
Transferring your tax paperwork to electronic versions could also pay off in added green in your bank account when you have the proper records to sustain your tax-cutting claims.
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