Good records will help you monitor the progress of your business, prepare your financial statements, identify source of receipts, keep track of deductible expenses, prepare your tax returns, and support items reported on tax returns.
What kinds of records should I keep?
You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
How long should I keep records?
The length of time you should keep a document depends on the action, expense, or event the document records. You must keep your records as long as they may be needed to prove the income or deductions on a tax return.
The length of time you should keep a document depends on the action, expense, or event the document records. You must keep your records as long as they may be needed to prove the income or deductions on a tax return.
How long should I keep employment tax records?
You must keep all of your records as long as they may be needed; however, keep all records of employment taxes for at least four years.
You must keep all of your records as long as they may be needed; however, keep all records of employment taxes for at least four years.
How should I record my business transactions?
Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. These documents contain information you need to record in your books.
Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. These documents contain information you need to record in your books.
What is the burden of proof?
The responsibility to prove entries, deductions, and statements made on your tax returns is known as the burden of proof. You must be able to prove (substantiate) certain elements of expenses to deduct them.
The responsibility to prove entries, deductions, and statements made on your tax returns is known as the burden of proof. You must be able to prove (substantiate) certain elements of expenses to deduct them.
References/Related Topics
- Good Recordkeeping Helps Avoid Headaches at Tax Time
- Publication 583 , Starting a Business and Keeping Records
- Farm Business Expenses section of Publication 225, Farmer's Tax Guide
- Virtual Small Business Tax Workshop, Lesson 1 - What you need to know about federal taxes and your new business
- Business With Employees
- Operating a Business
- Recordkeeping (Audio)
- Use of Electronic Accounting Software Records; Frequently Asked Questions and Answers
Great post.
ReplyDeleteYou have a great policy of having a low turnover of staff so that your clients do not have a new accountant every year. Great video on the front page of your website.
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