For most people, the headaches of tax returns are well behind you. This is a great time to begin planning for 2011. If you found yourself digging for information or missing tax records, you can avoid those headaches by planning ahead and making your information as accurate, up to date, and consolidated as possible.
In addition, keeping organized records ensures a much soother audit if your return is selected for examination.
For an individual, make sure to keep your records together. A few of the items you’ll want to keep are:
1. Bills
2. Credit card and other receipts
3. Invoices
4. Mileage logs
5. Canceled or imaged checks
6. Any information that may pertain to a credit or deduction you claimed
For a business owner the same will apply. However you may have additional documentation to track.
1. Gross receipts or point of sales reports, bank statements, and reconciliation reports.
2. Proof of reimbursements, such as meals, postage, mileage, and other items provided under a reimbursement plan.
3. Employment tax records must be kept for at least four years. I suggest employing a payroll service, such as Primepay. Your records will be stored electronically online and always available.
4. If you are using accounting software, be sure have it updated and reconciled at least quarterly. This will not only aid in management decisions but reduce your CPA expense during tax season. Also remember, accounting software is not a substitute for the supporting documentation required by the IRS.
No one likes tax time. You can make yours less stressful by keeping up with your records during the year, saving you both money and time that could be spent concentrating on your profession.
Dog days of summer
For most people, the headaches of tax returns are well behind you. This is a great time to begin planning for 2011. If you found yourself digging for information or missing tax records, you can avoid those headaches by planning ahead and making your information as accurate, up to date, and consolidated as possible.
In addition, keeping organized records ensures a much soother audit if your return is selected for examination.
For an individual, make sure to keep your records together. A few of the items you’ll want to keep are:
1. Bills
2. Credit card and other receipts
3. Invoices
4. Mileage logs
5. Canceled or imaged checks
6. Any information that may pertain to a credit or deduction you claimed
For a business owner the same will apply. However you may have additional documentation to track.
1. Gross receipts or point of sales reports, bank statements, and reconciliation reports.
2. Proof of reimbursements, such as meals, postage, mileage, and other items provided under a reimbursement plan.
3. Employment tax records must be kept for at least four years. I suggest employing a payroll service, such as Primepay. Your records will be stored electronically online and always available.
4. If you are using accounting software, be sure have it updated and reconciled at least quarterly. This will not only aid in management decisions but reduce your CPA expense during tax season. Also remember, accounting software is not a substitute for the supporting documentation required by the IRS.
No one likes tax time. You can make yours less stressful by keeping up with your records during the year, saving you both money and time that could be spent concentrating on your profession.