Depending on the type of business you have will determine the type of business records you need to keep for federal tax purposes. I would also include a summary of your business transactions as well. You can keep your summary in your business book. An Accounting journal or ledger would work fine. Also, your gross income, deductions, and credits need to be shown in your business book.
It is ok to use electronic accounting software but you will still need to keep original documents for certain items. These documents support the entries in your business book as well as on your tax return.
Business Records to keep for your Taxes:
- Account Statements
- Canceled Checks
- Cash register tapes
- Deposit Slips edit Card charge slips
- Forms 1099-MISC
- Invoices
- Paid Bills
- Payroll
- Petty Cash Slips
- Receipts/ Receipt Books
- Travel, Transportation, Entertainment, and Gift Expenses
Don’t forget Assets, they are also an important part of your business so you will also need to track this information for your taxes as well. Your assets are the property you own and use for your business. You will need to calculate the annual depreciation and your gains and losses when you sell the assets.
Asset Documents and records to keep for your Taxes
- How and when you acquired the assets
- How much you paid for the assets
- Improvement costs
- Section 179 deduction taken
- Depreciation deductions
- Casualty losses (fires or storms)
- How you used the assets
- How and when you disposed the assets
- How much you sold the assets for
- Sale expenses
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