5 ms·

Why would you ever need to prove this kind of transactions to the tax man as an individual? As a business it’s your duty to take care of your recordkeeping, pr

by rosndo 5y ago

Why would you ever need to prove this kind of transactions to the tax man as an individual? As a business it’s your duty to take care of your recordkeeping, print out the invoices if you so prefer.

kube-system 5y ago
The first mortgage bill of the year typically includes tax statements for the prior year. Etc.
- rosndo 5y ago
  I thought this thread was about utility bills, but okay, I’ll play along with your incredibly specific example. Is this a weird american thing? At least here in the UK mortgage interest deductions are only applicable to businesses.
  - justin66 5y ago
    > I thought this thread was about utility bills It was, which is why your comment starting with "As a business" was so bizarrely off-topic. > Is this a weird american thing? At least here in the UK mortgage interest deductions are only applicable to businesses. Yes. American homeowners can under most circumstances treat their mortage interest payments as tax deductable.
    - deleted 5y ago
      [deleted]
    - rosndo 5y ago
      > It was, which is why your comment starting with "As a business" was so bizarrely off-topic. What do you mean by off-topic? Businesses receive utility bills too, and might genuinely be required to keep records of those. As far as I can tell, barring some very special circumstances, individuals never need to keep such records.
      - justin66 5y ago
        > As far as I can tell, barring some very special circumstances, individuals never need to keep such records. This is blatantly false. Unless paying taxes is a "very special circumstance." People don't want these records at hand purely for their own amusement, which seems to be the assumption you're operating under here.
        locooon 5y ago
        In what situation will an individual need to supply their utility bills to the taxman during an audit? > This is blatantly false. Unless paying taxes is a "very special circumstance." I’ve certainly never needed to pull up my utility bills while paying taxes as a private person. It really feels like you’re just coming up with stuff, utility bills aren’t normally tax deductible (unless you are a business). There’s no reason you’d ever need them for the taxman any more than your grocery story receipts.
        justin66 5y ago
        Wow, you really created an account to make that comment? > In what situation will an individual need to supply their utility bills to the taxman during an audit? The bills would be useful if they expensed some of those payments, deducted them, or whatever. With a record number of people working from home, some portion of those expenses might be tax deductible for some people, some people might receive reimbursements from an employer, etc. (nobody said anything about an audit) > I’ve certainly never needed to pull up my utility bills while paying taxes as a private person. I think we can all agree that if you have never done this, it's unthinkable that anyone would ever do this.
        rosndo 5y ago
        justin66 5y ago
        You would save the records for deductions or business expenses or whatever as a bookkeeping measure - and as a tax precaution, yes - even if you were not expecting an audit. Audits are fairly unusual. (Way, way upthread jacquesm cited tax audits as a reason for these records to be physically provided, but they're a useful and common means of communication when employing a tax preparer or bookkeeper as well. And back to the original point, this is all even more likely to be true of an "old" person.) The cost of saving paper records, for an individual, is fairly close to zero, whereas it's a colossal pain in the butt to track down stuff later. Make that mistake once and you won't do it again.
  - formerkrogeremp 5y ago
    You can deduct home mortgage interest [1]. Another way in which homeownership and to an extent NIMBYism is subsidized in the tax code and by government policies. [1] https://www.irs.gov/publications/p936#:~:text=You%20can%20deduct%20home%20mortgage,incurred%20before%20December%2016%2C%202017 https://www.irs.gov/publications/p936#:~:text=You%20can%20de....
  - lotsofpulp 5y ago
    There is a federal mortgage interest tax deduction, and there may also be a state level deduction depending on the state since they each have different tax laws. On the federal level, 90%+ people do not use the mortgage interest tax deduction because doing so would cost them more than not using it.
  - kube-system 5y ago
    It is an American thing, and it's often more than just mortgage interest, as it is standard to have our property taxes and insurance(s) escrowed through the mortgage as well.
- Aaargh20318 5y ago
  But the mortgage giver already sends those to the tax authority. How else do you think they have all your mortgage data pre-filled when you file your taxes ?
  - kube-system 5y ago
    I wish my tax authority did that... on any of my tax returns.
    - deleted 5y ago
      [deleted]
    - kwhitefoot 5y ago
      It's how it is done in Scandinavia and most of Europe. I only have to add a few numbers because I have some small investments offshore, otherwise everything including investments in mutual funds is already itemized.
  - athriren 5y ago
    In the United States, even paying for the highest level of TurboTax does not get me the ability to have my mortgage information prefilled. Still have to enter the information that Chase sent to the IRS on an IRS form in manually on my form. Tax preparation in the US is truly the wild west.
phil21 5y ago
It's an American urban legend passed down from a time it may or may not have mattered. What did matter in living memory (thus passed down to at least this generation) is that saving utility bills for 7 year can establish credit. My parents still tell me to do this to this day, since that's how they were able to qualify for a home loan having not participated in the credit system otherwise. Nowadays most such transactions are reported to a credit bureau, so they are either already on record or (almost?) no banks will care to see them.
- SilasX 5y ago
  Huh? Paid utility bills don't help to establish a credit history on your credit report even today.
  - amflare 5y ago
    It doesn't, but multiple years worth of rent/utility bills can be used as a substitute so long as you are willing to jump through a couple extra hoops and pay a little bit more in interest for the privilege. My girlfriend just went though this process. She has no credit because she never got a CC and always saved up and paid for stuff like her car in cash. Over the winter she was looking to buy a house (didn't pan out for other reasons), and basically her only option was getting a loan manually underwritten. Part of that process was using a minimum of 2 years worth of bills as a replacement for a credit score. And the only loans available were several points more expensive than she could have gotten if she was able to do things the "normal" way.
    - SilasX 5y ago
      Yes, that was my point. If you can get the lender to look at your history, it matters, like anything else. But those transactions do not establish a credit history associated with your credit score.

by rosndo 5y ago

Why would you ever need to prove this kind of transactions to the tax man as an individual? As a business it’s your duty to take care of your recordkeeping, print out the invoices if you so prefer.

kube-system 5y ago

The first mortgage bill of the year typically includes tax statements for the prior year. Etc.

rosndo 5y ago
I thought this thread was about utility bills, but okay, I’ll play along with your incredibly specific example. Is this a weird american thing? At least here in the UK mortgage interest deductions are only applicable to businesses.
- justin66 5y ago
  > I thought this thread was about utility bills It was, which is why your comment starting with "As a business" was so bizarrely off-topic. > Is this a weird american thing? At least here in the UK mortgage interest deductions are only applicable to businesses. Yes. American homeowners can under most circumstances treat their mortage interest payments as tax deductable.
  - deleted 5y ago
    [deleted]
  - rosndo 5y ago
    > It was, which is why your comment starting with "As a business" was so bizarrely off-topic. What do you mean by off-topic? Businesses receive utility bills too, and might genuinely be required to keep records of those. As far as I can tell, barring some very special circumstances, individuals never need to keep such records.
    - justin66 5y ago
      > As far as I can tell, barring some very special circumstances, individuals never need to keep such records. This is blatantly false. Unless paying taxes is a "very special circumstance." People don't want these records at hand purely for their own amusement, which seems to be the assumption you're operating under here.
      - locooon 5y ago
        In what situation will an individual need to supply their utility bills to the taxman during an audit? > This is blatantly false. Unless paying taxes is a "very special circumstance." I’ve certainly never needed to pull up my utility bills while paying taxes as a private person. It really feels like you’re just coming up with stuff, utility bills aren’t normally tax deductible (unless you are a business). There’s no reason you’d ever need them for the taxman any more than your grocery story receipts.
        justin66 5y ago
        Wow, you really created an account to make that comment? > In what situation will an individual need to supply their utility bills to the taxman during an audit? The bills would be useful if they expensed some of those payments, deducted them, or whatever. With a record number of people working from home, some portion of those expenses might be tax deductible for some people, some people might receive reimbursements from an employer, etc. (nobody said anything about an audit) > I’ve certainly never needed to pull up my utility bills while paying taxes as a private person. I think we can all agree that if you have never done this, it's unthinkable that anyone would ever do this.
        rosndo 5y ago
        justin66 5y ago
        You would save the records for deductions or business expenses or whatever as a bookkeeping measure - and as a tax precaution, yes - even if you were not expecting an audit. Audits are fairly unusual. (Way, way upthread jacquesm cited tax audits as a reason for these records to be physically provided, but they're a useful and common means of communication when employing a tax preparer or bookkeeper as well. And back to the original point, this is all even more likely to be true of an "old" person.) The cost of saving paper records, for an individual, is fairly close to zero, whereas it's a colossal pain in the butt to track down stuff later. Make that mistake once and you won't do it again.
- formerkrogeremp 5y ago
  You can deduct home mortgage interest [1]. Another way in which homeownership and to an extent NIMBYism is subsidized in the tax code and by government policies. [1] https://www.irs.gov/publications/p936#:~:text=You%20can%20deduct%20home%20mortgage,incurred%20before%20December%2016%2C%202017 https://www.irs.gov/publications/p936#:~:text=You%20can%20de....
- lotsofpulp 5y ago
  There is a federal mortgage interest tax deduction, and there may also be a state level deduction depending on the state since they each have different tax laws. On the federal level, 90%+ people do not use the mortgage interest tax deduction because doing so would cost them more than not using it.
- kube-system 5y ago
  It is an American thing, and it's often more than just mortgage interest, as it is standard to have our property taxes and insurance(s) escrowed through the mortgage as well.
Aaargh20318 5y ago
But the mortgage giver already sends those to the tax authority. How else do you think they have all your mortgage data pre-filled when you file your taxes ?
- kube-system 5y ago
  I wish my tax authority did that... on any of my tax returns.
  - deleted 5y ago
    [deleted]
  - kwhitefoot 5y ago
    It's how it is done in Scandinavia and most of Europe. I only have to add a few numbers because I have some small investments offshore, otherwise everything including investments in mutual funds is already itemized.
- athriren 5y ago
  In the United States, even paying for the highest level of TurboTax does not get me the ability to have my mortgage information prefilled. Still have to enter the information that Chase sent to the IRS on an IRS form in manually on my form. Tax preparation in the US is truly the wild west.

phil21 5y ago

It's an American urban legend passed down from a time it may or may not have mattered. What did matter in living memory (thus passed down to at least this generation) is that saving utility bills for 7 year can establish credit. My parents still tell me to do this to this day, since that's how they were able to qualify for a home loan having not participated in the credit system otherwise. Nowadays most such transactions are reported to a credit bureau, so they are either already on record or (almost?) no banks will care to see them.

SilasX 5y ago
Huh? Paid utility bills don't help to establish a credit history on your credit report even today.
- amflare 5y ago
  It doesn't, but multiple years worth of rent/utility bills can be used as a substitute so long as you are willing to jump through a couple extra hoops and pay a little bit more in interest for the privilege. My girlfriend just went though this process. She has no credit because she never got a CC and always saved up and paid for stuff like her car in cash. Over the winter she was looking to buy a house (didn't pan out for other reasons), and basically her only option was getting a loan manually underwritten. Part of that process was using a minimum of 2 years worth of bills as a replacement for a credit score. And the only loans available were several points more expensive than she could have gotten if she was able to do things the "normal" way.
  - SilasX 5y ago
    Yes, that was my point. If you can get the lender to look at your history, it matters, like anything else. But those transactions do not establish a credit history associated with your credit score.