Record Keeping

How To Keep Records

Keeping adequate records not only helps you get the most deductions come tax time, but it’s required by law.  No matter what your system, file folders, accordian files, plastic baggies, make sure you are keeping accurate records and filing them appropriately.

You must keep:
     • Receipts
     • Sales Slips
     • Invoices
     • Bank Deposit Slips
     • Cancelled Checks
     • Other documents to substantiate
            • income
            • deductions
            • credits

Keep a notepad in your purse, car or briefcase to log your mileage to and from client meetings, business lunches or dinners, business gift expenses and receipts for all.
     • Date/Time
     • Location
     • Amount
     • Business Purpose
     • Business Relationship

Enter these into a spreadsheet at the end of every week to keep all expenses organized.
 
As of January 1, 2013, the mileage rates are as follows per IRS.gov.
     • 56.5 cents per mile for business miles driven
     • 24 cents per mile driven for medical or moving purposes
     • 14 cents per mile driven in service of charitable organizations

How long should you keep these records?
     • 3 years after the return is due or filed, or
     • 2 years from the date the tax is paid, whichever is later.

The IRS has a publication for best recordkeeping practices at IRS.gov, keyword “Publication 583

 

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