Record-keeping

2024 Tax Planning: Recordkeeping for Small Businesses

by
Summer Blake
on
7/23/2024
2024 Tax Planning: Recordkeeping for Small Businesses

2024 Tax Planning: Recordkeeping for Small Businesses

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As a small business owner, you know how important it is to keep good records. Whether you run a software company, a frozen yogurt shop, a hair salon, or a landscaping service, you need to track your income and expenses accurately and efficiently. Good recordkeeping can help you in many ways, such as:

  • Measuring your business performance and growth
  • Preparing reliable financial statements
  • Identifying where your money comes from and where it goes
  • Keeping track of tax deductions and credits
  • Filing accurate and timely tax returns and supporting your tax claims

You can choose any recordkeeping system that suits your business needs, as long as it clearly shows your income and expenses. Some businesses and their workflows even require special forms and/or software to manage and track their business records. As part of managing your business, you should keep all your business documents, such as receipts, invoices, bank statements, and contracts, for at least three years. These documents will help you prove your income and expenses if the IRS ever questions your tax return.

You should also keep a summary of all your business transactions, such as sales, purchases, payments, and receipts. You can use books called journals and ledgers, which you can find at any office supply store, or you can use electronic records, such as spreadsheets, databases, or accounting software. Whatever method you use, make sure it is consistent, complete, and secure.

Remember, you are responsible for the information on your tax return. This is called the burden of proof. If you want to claim a deduction or a credit for your business expenses, you need to have records that show what the expense was, how much it was, when it was, and how it was related to your business.

Finally, don't forget to keep your employment tax records for at least four years. These include your payroll records, your tax returns, and your tax deposits. These records will help you report and pay your employment taxes correctly and avoid any penalties or interest.

We are here to help you

If you have any questions about recordkeeping for your small business, or if you need any assistance with your tax planning or filing, please don't hesitate to contact us. We are always happy to hear from you and to help you achieve your business goals. You can reach us at 443-406-6441 or email at [email protected] us at any time.

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Summer Blake

Summer Blake

Accountant / Tax Advisor

As a seasoned Accountant and Tax Professional at AllTax Accounting, I bring over a decade of experience to the table. My expertise lies in delivering comprehensive Accounting, Tax, and Advisory services that cater to the diverse financial needs of our clients. At AllTax Accounting, we pride ourselves on our commitment to financial health and client success.

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