Tax FAQ Series – Do I Need To Keep Records?
Yes! What records you need for your business should be shaped by the needs of your business (not the IRS). If you need detailed records of inventory or customer receivables, then keep them. And retain them if they’re relevant. If you need little IT information, then don’t establish an elaborate system for logging everything.
The records the IRS requires may nor may not be the same as your business needs. As a minimum, the IRS requires date, amount and description for each transaction. In addition, expenses such as meals and entertainment, travel and auto expense require more detailed logs. If you intend to claim these items, make sure you have the records to support them. For tax purposes, you should retain records for at least four years after the due date of the return. And yes, you can keep the records digitally.
If you have a question about your record-keeping practices, a potential audit, or would like to discuss your tax return, call us today to schedule your free consultation. Cal (480) 888-7111 or submit a web request here.
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