Take Control of Your Business Finances – Tips for Staying Up to Date and Organized with Your Tax Documentation
I was recently interviewed by My Business Magazine for an article titled “Tools of the Tax Trade” – about how technology can help us take control of tax documentation.
Taking Control of Your Business Finances – and Protecting Yourself From IRS Audit Penalties
Cool new products like the Neat Co.’s NeatReceipts handheld scanner has helped many taxpayers by making it easier and less time-consuming to keep track of thier expenses. NeatReceipts comes with software that scans and categorizes receipts and documents that can be output to Excel, Quicken, QuickBooks or TurboTax. You can sync it with your accounting software and print out everything at tax time.
Keeping careful track of receipts and documentation is a must for any business owner. Plus, if you’re audited by the IRS–and more small businesses are being targeted by the IRS today than in the past–you’ll need to provide the IRS auditors with a full paper trail, or risk paying additional taxes and penalties.
Additionally, if you’re scanning original documents, make sure you have some sort of backup on a memory stick or a DVD. If your hard drive crashes, you need a way to retrieve all your data.
How Long Do You Need to Store Your Records?
Your tax documentation can pile up quickly. You should keep cancelled checks, credit card statements, charitable contribution receipts–anything you’re including on that tax return. But how long do you need to hang on to all of this stuff?
- You should keep your documents for at least four years from the date you file a return. The IRS has three years from the date you file a return to audit you.
- However, since during the course of an audit the IRS can go back and reexamine six years worth of returns, I advise my clients to keep everything for seven years.
** If you are in trouble with the IRS, our specialized staff of attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-IRS-PROBLEMS.
More Tax Help, IRS News and Tax Relief Tips:
- Why the IRS Picks on Small Businesses and How to Avoid Triggering an Audit
- What Safe Harbor Really Means for Ponzi Victims – IRS Estimates it will Refund Fraud Victims $17 Billion, But Not Without a Fight
- Tax Changes in the American Recovery and Reinvestment Act of 2009
- Congressional Budget Office Predicts $1.8 Trillion Deficit Due in Part to Changes in Tax Policy
- Wealthy Taxpayers Are More Likely to be Audited and Should Know How to Avoid Audit Red Flags
Tags: business finances, IRS audit, Michael Rozbruch, mybusinessmag, NeatReceipts, quickbooks, small, small business, small business tax advice, tax attorney, tax audit, tax documentation, tax expert, tax help, tax problems, tax relief, tax resolution, tax resolution expert, tax resolution services, Tax Tips, turbotax
June 30th, 2009 at 6:59 am
[...] prepare taxpayers for unexpected disasters and to protect important tax documents, the IRS has issued detailed guidelines on how taxpayers need to duplicate their records in order [...]
May 3rd, 2011 at 10:05 am
[...] Keeping careful track of receipts and documentation is a must for any business owner. Plus, if you’re audited by the IRS–and more small businesses are being targeted by the IRS today than in the past–you’ll need to provide the IRS auditors with a full paper trail, or risk paying additional taxes and penalties. [...]