You’ve been working on getting your financial information together for your tax return. All those papers have bubbled to the top! Which ones should you keep?

The Federal Deposit Insurance Corporation (FDIC) says it can’t tell you when it is safe to throw away financial documents. They do say to keep the information as long as the IRS can assess you additional taxes. Right now, that is approximately seven years. Laws change. Always check with your CPA for the latest laws.

Credit Card Statements:  FDIC says to save the statements for one year, unless they have tax significance. I save mine for years if I have purchased a big item. If there is a fire or other disaster that affects my personal property, I can prove to the insurance company and/or the IRS that I did have the item and how much it was worth at time of purchase.

Bank Account Statements:  Check with your financial institution and determine how far back they keep statements available to you.

Canceled Checks:  Again if purchases are tax related, keep canceled checks seven years. If they are related to your house purchase, renovations or big items that you purchased, I keep the canceled checks in a file just for those things — and keep them indefinitely. If I sell the house, I will keep them seven years longer.

Banks are required to keep copies of checks for seven years.

Deposit, ATM, credit card and debit card receipts:  FDIC reminds us to save them until the transaction appears on a statement and you know the amount is correct. If it is for a big item and it has a warranty, save the receipt at least until the warranty is up. Remember, you might want to save it longer for insurance and/or IRS reasons, if there is a disaster.

Electronic Records:  Make sure you back up your data. Technology is always changing. Make sure you are using a method that allows the information to be retrieved.

Use the method of filing important papers that works for you and keeps everything organized and safe.

For more consumer tips from Better Business Bureau of Southern Arizona visit www. tucson.bbb.org.

Becoming a victim of a “too good to be true offer” does not necessarily mean that all is lost. Better Business Bureau of Southern Arizona is aware that some taxpayers may have experienced losses in certain investment arrangements discovered to be criminally fraudulent. Often these investments turn out to be “Ponzi Schemes” where investors lose because there are no real profits to be had.

The Internal Revenue Service (IRS) has a revenue procedure that provides an optional safe harbor treatment for taxpayers who experienced losses in certain investment arrangements discovered to be criminally fraudulent. It also describes how the IRS will treat a return that claims a deduction for such a loss but does not use the safe harbor treatment as described in this revenue procedure. Taxpayers claiming a loss are instructed to mark “Revenue Procedure 2009-20″ at the top of the Form 4684.

“It is devastating when someone falls victim to a fraudulent investment scheme,” said Kim States, BBB president. “It is important to be proactive before making a decision, but also to make sure that everything in your power is done to clean up the damage after.”

BBB offers these tips for someone looking for a legitimate investment.

• Don’t invest with someone just because your friends/colleagues/associates do. There’s no guarantee that they’ve done their homework about an investment. Furthermore, if the seller is part of that group, it’s likely everyone trusts this person and subsequently do not check into their past or their investments.
• Be aware of anyone who claims to be able to bring back a return above the market rate. This promise of a large return is alluring, but a red flag that something is not right. Do not trust anyone who claims to have a different or “special” way of making things happen.
• Find out as much as you can. Investing your hard earned money is not something you should take lightly. Ask questions and find out fully where you are putting your money. Be open to references as well doing your own research. Check out Business Reviews with Better Business Bureau.
• Get as much information as possible in writing. Be sure to get details of the offer, names of validating organizations, the organization’s own research documentation, and copies of any contracts you will be asked to sign.
• Consult an unbiased third party. Look for an unconnected broker or licensed financial advisor before investing, research the advisor or broker through business reviews at www.bbb.org.

During tax season Better Business Bureau of Southern Arizona advises taxpayers to take the proper steps to avoid making mistakes when selecting tax preparation help to avoid costly mistakes on their returns.

Since the beginning of January, BBB has received over 500 inquiries from consumers into Southern Arizona tax preparation services- a 95 percent increase over the same period a year earlier.

“The increase in our inquiries about tax preparation shows that people are being more cautious about who they choose for assistance in their taxes,” said Kim States, BBB president. “Your BBB advises taking the time to be thorough the first time around to avoid a headache in the future.”

Denisse DiPierto, owner of Ms. Tax- a Tucson accountancy- told BBB that consumers should take a long look at a tax preparer’s track record before bringing their business to them.

“Consumers should go to an experienced and ethical professional who knows the tax law,” DiPierto said. “The cheapest isn’t always the best- you want someone who really knows the tax laws, and will take every allowable deduction on your behalf.”

DiPierto stressed that since taxes and financial matters have so many legal ramifications it’s extremely important that consumers do their homework before hiring anyone. BBB reminds consumers that if a mistake is made on their tax return the IRS will hold them solely responsible for it, not their tax preparer.

BBB Tips:

Ask around. Get referrals from friends and family on who they use, and check the BBB Reliability Report on tax preparation services free-of-charge at www.tucson.bbb.org.

Look for credentials. Ideally, tax preparers should either be a certified public accountant, a tax attorney, or an enrolled agent. All three can represent taxpayers before the IRS in all matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.

Don’t fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid any tax preparers who base their fee on a percentage of the amount of the refund.

Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, consumers need to be able to contact their tax preparer throughout the year.

Read the contract and know what you’re paying for. Consumers must read tax preparation service contracts closely to ensure they understand issues such as, how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected, and whether the tax preparer will represent the consumer in case of an audit.

For more trustworthy advice from BBB on tax preparation visit www.tucson.bbb.org or call (520)888-5353.