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Record Keeping |
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Record keeping is important! How well you maintain your records is almost as important as how well you operate your business. The results of any type of audit – workman’s comp or liability insurance, sales tax, income tax – will ultimately come down to YOUR RECORDS. The more organized you are about your information, the more accurate and timely we can be and the less likely an auditor will make changes that could cost you money. If you have questions regarding the best way to file and store your records please call our office. Retain all of your receipts and records for a minimum of three years. The most troublesome deductions involve vehicles, meals and entertainment. Here are a few guidelines: If you operate any vehicle that is used for your business, IRS requires that you maintain a mileage record. Record the odometer reading on January 1st every year. If you operate a vehicle that is part business and part personal, you are required to keep a log. Record the odometer reading at the start of each business trip, the destination, purpose of the trip, the ending reading and the total miles traveled. The total and business miles driven for the year will be reported on your tax return and we can determine your vehicle deduction accurately from this information. Deductions for most meals and entertainment are 50% of the amount spent. Indicate on your receipt, the name of the person and the business reason for the meeting, meal, etc. Don’t confuse this type of deduction with company parties (ie. Christmas luncheons for employees) which are considered an employee benefit and are 100% deductible. [ Return to Table of Contents ]
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