Good Recordkeeping Helps Avoid Headaches at Tax Time
This video has been removed from the IRS website – IRS Short Video on Keeping Records for Taxes
Here is a link to the current IRS website containing a few articles about business financial record keeping.
If you are wondering about who has the Burden of Proof, click here to read this IRS article. It states ...
The responsibility to prove entries, deductions, and statements made on your tax returns is known as the burden of proof. You must be able to prove (substantiate) certain elements of expenses to deduct them. Generally, taxpayers meet their burden of proof by having the information and receipts (where needed) for the expenses. You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. Additional evidence is required for travel, entertainment, gifts, and auto expenses.
Small business owners are responsible for maintaining the company records. Keeping the financial and employment-withholding records for 4 or more years may be necessary depending on your circumstances. Always check with your tax adviser for specifics to your circumstances.
IRS Publication 583 – Starting a Business and Keeping Records – contains useful business startup information. The section about record keeping starts on page 11. It includes info on paper/hard-copy records as well as electronic records.
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