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What Kinds of Records should I Keep?

 

As a sole proprietor, you need to keep documentation to support the income and deduction claimed on your return. These records should be kept for a MINIMUM of four years after the due date of the return.

If you purchase business assets, you generally need to keep the records of the purchase for at least three years after the year in which you dispose of the asset. Payroll records should be kept for at least seven years; longer if you have employees who were under the age of majority in your state.

As to the form of records to keep, these can range from a recap of your business checking account, to a computer printout from a cash tracking program such as QuickBooks, or a manual bookkeeping set purchased at a local office supply store. It may be a good idea to meet with a local tax professional for guidance in setting up your record keeping method.

For further information, obtain IRS Publication 583.

 

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Disclaimer
We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017