S. D. HOGAN & COMPANY, LLC

Certified Public Accountants

All posts

Taking care of business: record keeping for small businesses

by | Feb 5, 2020 | Uncategorized | 0 comments

Small business owners should keep good records. This applies to all businesses, whether they have a couple dozen employees or just a few. Whether they install software or make soft-serve. Whether they cut hair or cut lawns. Keeping good records is an important part of running a successful business.

Here are some questions and answers to help business owners understand the ins and outs of good recordkeeping.

Why should business owners keep records?

Good records will help them:

Monitor the progress of their businessPrepare financial statementsIdentify income sourcesKeep track of expensesPrepare tax returns and support items reported on tax returns

What kinds of records should owners keep?

Small business owners may choose any recordkeeping system that fits their business. They should choose one that clearly shows income and expenses. Except in a few cases, the law does not require special kinds of records.

How long should businesses keep records?

How long a document should be kept depends on several factors. These factors include the action, expense and event recorded in the document. The IRS generally suggests taxpayers keep records for three years.

How should businesses record transactions?

A good recordkeeping system includes a summary of all business transactions. These are usually kept in books called journals and ledgers, which business owners can buy at an office supply store. All requirements that apply to hard copy books and records also apply to electronic business records.

What is the burden of proof?

The responsibility to validate information on tax returns is known as the burden of proof. Small business owners must be able to prove expenses to deduct them.

How long should businesses keep employment tax records?

Business owners should keep all records of employment taxes for at least four years.

If you would like to know more about small business record keeping, please contact S. D. Hogan & Company | Certified Public Accountants by phone at (757) 777-3672 or email at info@sdhogan.net.


Reprinted with the permission of the Internal Revenue Service.

Why is my IRS payment different from what I expected?

Why is my IRS payment different from what I expected?

As people across the country receive their Economic Impact Payments (IRS payment), some might receive a different amount than they expected. Eligible individuals receive a payment for $1,200. Two eligible individuals filing a joint return receive $2,400. And, eligible...

COVID-19 Employee Retention Credit

COVID-19 Employee Retention Credit

The New Employee Retention Credit   The employee retention credit is designed to encourage businesses to keep employees on their payroll. The amount of the credit is 50% of qualified wages paid up to an annual limit of $10,000, which equals a maximum credit...

IRS Tax Help for COVID-19, Continued

IRS Tax Help for COVID-19, Continued

Due to COVID-19, the IRS is providing relief on a variety of issues as part of the People First Initiative. The IRS is modifying certain activities through the filing and payment deadline, Wednesday, July 15, 2020. Here's what people need to know about relief related...

Pin It on Pinterest