As months and years pass by, your business records will help you to make vital business decisions along the way. These decisions will range from buying equipment, hiring employees, to thinking whether or not it’s time to get a bigger space. You will also want to know how much your original investment returned to you. To make these decisions, you have to make sure you have your records in order.
“Why keep records?”
Simply put, your business records are the history and accomplishments of what you have done so far. A good CPA will be able to give you the perspective you need on how things are going, and more importantly, what to do next. Wise tax planning is the key to running a successful business.
Some additional reasons are:
- To help prepare your tax returns
- To support items on your business tax returns
- Help defend your deductions during with IRS audits
- Prepare your financial statements, and
- To provide easier access to a line of credit at the bank.
How Long Do I Keep Records?
You must keep all your records until the period of limitation ends for the return on which you have listed the item, whether it is income or deduction related. The period starts from the date the tax return was filed. If you filed the return earlier, the date is still on the due date of the return.
| Should You… | Applicable Period |
|---|---|
| File a claim for a loss from worthless securities or a bad debt deduction | 7 years |
| File a claim for credit or refund after you filed your return | Later of 3 or 2 years after the tax was paid |
| Owe additional tax | 3 years |
| Do not report income that you should report and it is more than 25% of the gross income shown on the return | 6 years |
| File a fraudulent return | No time limit |
| Do not file a return | No time limit |
As a business owner, the last thing you may want to do at the end of the day is to sit down in front of a computer and type in numbers. Not to worry. MiklosCPA is here to help.
We can provide affordable and customized bookkeeping services at our California-based accounting firm. Whether you just need a few templates to get you started, or you would like us to take a more active approach in getting your information into QuickBooks or another accounting system, we work hard to help simplify the process for our clients so you can spend more time focused on the most important thing: YOUR BUSINESS.
Running a successful business requires professionals. Contact our accounting practice for a free consultation on how we can help your business grow with your own customized solution.
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