Yes, I know. No one ever wants to think about taxes. But look at it this way. Paying taxes typically means your business is doing at least OK — and that’s a good thing.
I was reminded by a release from the IRS representative of some things you should be thinking about (and doing!) right now.These tips will help reduce your stress level come tax time.
If you haven’t already done so, it’s time to organize your records. You can avoid headaches at tax time with good records because they will help you remember transactions you made during the year.
Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you are billed for additional tax.
In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.
Small business owners must keep all employment tax records for at least four years after the tax becomes due or is paid, whichever is later.
Other examples of important documents business owners should keep include:
- Gross receipts: Cash register tapes, bank deposit slips, receipt
books, invoices, credit card charge slips and Forms 1099-MISC
- Proof of purchases: Canceled checks, cash register tape receipts,
credit card sales slips and invoices
- Expense documents: Canceled checks, cash register tapes,
account statements, credit card sales slips, invoices and petty cash
slips for small cash payments
- Documents to verify your assets: Purchase and sales invoices, real
estate closing statements and canceled checks.
More information is available in these IRS publications: