Good recordkeeping may be the most important task you can do to prevent you from incurring tax issues on your business. Records allow you to prove that you are eligible and entitled to listed deductions and expenses. There is no way to avoid proper recordkeeping
Canceled checks, daily receipts, and petty cash transactions make up the contents of a well-organized accounting ledger that has chronological journal entries and reflects every business-related transaction. Each original document should be saved to a hard drive to prevent confusion allowing for complete transparency. All the financial statements issued by any online bank should be printed and filed as original reference documents, as well as all employee payroll expenses.
Financial records should be kept for no less than 4 years and employee records for no less than 7 years. If any property is involved, keep all records even after you sell the property as often times there can be post-sale occurrences that render a property owner to reference related documents.
If you have not already been keeping accurate records, start today. The IRS and your state demand that any business pays their fair share of taxes, however business owners are entitled to certain deductions and refunds so correct and accurate records are essential to claim the benefits you are owed.
If you think you need assistance organizing your books I am happy to provide a 20-minute free consultation to discuss your recordkeeping financial planning, wealth management, and exit strategy requirements.
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